REPORT OF THE COMPTROLLER GENERAL OF THE UNITED STATES Farmers Home Administration Use Of Grant Funds For Water And Waste Disposal Systems GAO was asked why the Farmers Home Administration has not always provided the maximum funds allowed by law or its own regulations in providing grants for water and waste disposal systems in rural areas. Of the 650 projects receiving grants in fiscal year 1976 (through June 301,429 (66 percent) did not receive the highest possible grant. The Agency said the basic goal is to reduce payments to a reasonable level for farmers, ranchers, rural residents, and other eliglble rural users, and that after considering all fund- ing on the projects covered by the analysis, this goal has been accomplished. It said it was not willing to adjust grant amounts on the projects already financed, because it would set a precedent difficult to change. CED-77-109 AUGUST 17, 1977 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, DC. 20548 B-114873 The Honorable James Abourezk United States Senate Dear Senator Abourezk: In response to your June 14, July 14, and July 21, 1976, letters, the General Accounting Office (GAO), in cooperation with the National Demonstration Water Project (Project), undertook an analysis regarding your concern that the Farmers Home Admininstration (Agency) was not making grants for rural water and waste disposal projects at the maximum amounts permitted by its regulations and authorized by the Congress. As suggested, we met with the Project and a member of your office; we agreed that the analysis would cover all projects that received an Agency grant during fiscal year 1976 (through June 30). We also agreed that the Project would perform the actual analysis and then make the results available to us to respond to your request. The completed Project analysis reveals that 429 projects, or 66 percent, of the 650 projects included in the analysis, did not receive the maximum allowable grant. The amount of underobligation for the 429 projects totaled $28,398,364, or an average of $66,197 per project. The amounts ranged from a low of $5 to a high of $1,257,500. The Project’s analysis also revealed that 78 projects, or 12 percent of the total, received the maximum allowable grant and that 143 projects, or 22 percent of the total, received more than the maximum allowable grant. However, only five projects would be considered overfunded in terms of the authorizing legislation in that the grant for these projects exceeded 50 percent of eligible project costs. The total amount of overfunding for these five projects amounted to only $20,955. We have given the Agency the details on these five projects so that corrective action can be taken. The remaining 138 projects were apparently overfunded according to Agency regulations but not according to the authorizing legislation. Our report discusses the development and application of the methods used in the analysis and the potential for making CED-77-109 B-114873 adjustments to the obligations of those projects not receiving the maximum allowable grant. Appendix I contains a State-by- State summary of the number and amounts of underobligated, fully obligated, and overobligated projects. Appendix II is a listinq of individual projects showing the amount of underobligation and/or overobligation as computed by the Project. Appendix III identifies, by name, each project in appendix II that was underobligated. METHODOLOGY OF THE ANALYSIS --------------------------- The analysis consisted of calculating the maximum grant allowable under the three criteria applicable to the Agency's grant program. The maximum possible grant was determined by selecting the smallest possible grant permitted for a project on the basis of the three following criteria identified in the regulations: --The 50-Percent -----------------_- Rule: By statute, Agency grants cannot exceed 50 percent of total eligible project costs. --The l-Percent --------7--------- Rule: Agency regulations provide that grants will generally be limited to an amount necessary to reduce the debt service burden, assumed by the community, to 1 percent of the median family income of the community. --The Similar -----e.-------y---.-w--Community -a--- Rule: Agency regulations provide that grants will be used to reduce user costs to a reasonable level-- a rate comparable to that charged in similar communities. The original methodology developed for the preliminary phase of the study was too rigid in that it assumed that the three criteria for calculating the amount of Agency grant were uniformly applied throughout the country. After an indepth examination of a sample number of projects revealed that the three criteria were not rigidly and uniformly applied in every case, a revised and more comprehensive methodology had to be developed. The revised methodology called for a general case procedure, as well as a set of deviant procedures, to handle the project-by-project variations found in the two Agency forms used in performing the analysis. Since the Agency did not have specific instructions for determining grant amounts, one had to be developed on the basis of the best information available. We noted that, although the Agency had issued an administrative bulletin 2 ~-114873 to its State directors relative to determining grant amounts, this bulletin provided only general guidance, and not specific instructions, for determining the amount of a grant. However, since this bulletin was the best infor- mation available, we used it as a basis for our method- ology so as to have a consistant basis for performing our analysis. It must be noted that the previous grant determination form did not show how the grant amount was determined, but rather showed the amount of grant and the effect it had on user costs as well as similar data. Following the analysis, the Agency revised its form for determining the grant amount to provide additional guidance in documenting the actual grant determination. Development and application of the revised methodology was done by the Project with monitoring by us. At three points during the processing of the data, we participated in a comprehensive review of specific case discrepancies and refinement of the deviant procedures. In calculatiang the maximum possible grant for the projects studied, the general methodology, as developed, was followed, utilizing the data sources identified. However, most of the cases studied deviated from the general case. In fact, only 19 of the 650 projects included in the final analysis did not require the use of at least one deviant procedure. Most of the deviations were the result of numerical discrepancies in the two Agency forms used for the analysis. Twelve projects had to be excluded from the study because there were too many discrepancies or too much missing data in the Agency forms. Upon completion of the Project’s calculations, we randomly selected and analyzed a number of cases to check the validity of the methodology and the accuracy of the calculations. Our sample of 65, or 10 percent, of the projects studied revealed that although some type of error was made in 14, or 21.5 percent, of the cases, in only 5, or 7.7 percent, of the cases did the error affect the amount of grant the project should have received. The net effect of these errors indicate that the Project’s computations of total underobligations of $28.4 million was understated by about 0.49 of 1 percent. 3 ~-114873 POTENTIAL FOR ADJUSTMENTS OF GRANT AMOUNTS -------------------I-----~~--~------~--~- FOR UNDEROBLIGATED --------------------____I PROJECTS We asked an Agency official if it was legally permissible for the Agency to adjust the amounts of grant and loan obligations for those projects we found that did not receive the maximum allowable grant. In response to our question, the Agency Administrator requested a legal opinion from the Department of Agriculture’s Office of the General Counsel. He informed us, on December 17, 1976, that to increase the amount of grant obligation, with a corresponding decrease in the amount of loan obligation, posed a question of timing and of purpose for which the funds will be used. The Administrator’s response stated: ‘* * *if a loan and grant are closed, and the loan money has not been fully advanced, then the grant amount could possibly be increased since FmHA [Farmers Home Administration] still has control and can be certain that the grant funds would be used for eligible purposes. I’ The Administrator’s letter also stated that for constructed projects for which the loan and grant have been closed and all funds expended, that: I’* * *reimbursement by increasing the grant amount and decreasing the loan amount might be interpreted as refinancing , which is an unauthorized use of grant funds . ” In an April 25, 1977, letter, to the Acting Administrator of the Agency, we asked whether the Agency would be willing to make adjustments on those projects that were underfunded where it is legally permissible to do so. In his reply, the Acting Administrator stated that the Agency was opposed to retroactively adjusting the grant amounts for those projects covered in our analysis for the following reasons: --The computations were based strictly on a mechanical calculation and did not give consideration to the funding priorities established in each State. --Agency regulations do not require that the “maximum allowable grant” be made in every case. --Other factors, such as the availability of funds from other sources, affect the final determination of the grant amount. 4 B-114873 --The program has accomplished its basic goal of reoucinq user payments to a reasonable level, and any adjust- ments in grant amounts would not have a siqnif icant impact on the user payments. --Adjusting the grants for certain grant recipients covered by the analysis could set a precedent that would be difficult to change. The Acting Administrator also stated that the Fqency’s foremost concern is that the benefits of the program be fairly and equitably distributed to all eligible communities desiring Agency assistance, and that he believes that the Agency’s present program is being administered in such a manner. The scope of the report is limited to a discussion of the Project analysis and the Farmers Home Administration’s comments concerning adjustments to the obligations of those projects not receiving the maximum allowable grant. We will inform you in the event that the facts raised by the report indicate that action by GAO is needed to insure that the water and waste disposal program is implemented in accoruance with congressional intent. S incerely yours, Comptroller General of the United States 5 UNDER- AND OVEROBLIGATED WATER AND WASTE DISPOSAL PROJECTS FY 1976 (JUNE 30) Projects Total Iii-al-n $nderobligations Overobligations fully number of Name Number Number Amount Number Amount obligated projects., Alabama 1 22 $ 838,632 2 $192,288 24 Alaska 60 1 100,000 1 Arizona 2 3 168,300 3 392,996 6 Arkansas 3 33 992,358 1 647 1 35 P California 4 9 1,132,428 6 510,478 3 18 Colorado 5 7 246,920 2 19,522 9 .-’ Connecticut 6 2 43,500 2 Delaware 7 Florida 9 5 465,000 2 155,700 1 8 Georgia 10 9 103,960 4 177,049 6 19 Hawaii 61 1 1 Ii Idaho 12 6 211,260 6 .g w Illinois 13 18 1,124,900 2 20,688 3 23 H . Projects Total State Underobligations Overobligations fully number of Name Number Number Amount Number Amount obligated projects 3 "x Indiana 15 3 $ 69,663 3 $125,669 1 7 H Iowa 16 7 50,687 9 476,245 1 17 Kansas 18 6 259,626 1 7 Kentucky 20 14 653,065 3 732,411 1 18 Louisiana 22 13 70,805 1 53 6 20 Maine 23 2 237,774 1 39,299 3 Maryland 24 2 84,417 3 383,891 1 6 N Massachusetts 25 3 410,693 3 Michigan 26 2 548,304 5 378,181 1 8 Minnesota 27 16 1,869,769 3 30,563 19 Mississippi 28 36 1,811,223 3 151,528 1 40 Missouri 29 5 78,450 4 170,967 3 12 Montana 31 4 54,751 1 5 Nebraska 32 11 1,093,496 1 17,707 12 Nevada 33 New Hampshire 34 1 108,000 1 Projects Total z State Underobligations Overobligations fully number of - Name Number Number Amount Number Amount obligated projects i tf 2 New Jersey 35 1 $ 90,150 1 H New Mexico 36 3 15,500 9 $ 663,724 1 13 New York 37 6 997,030 4 261,942 10 No. Carolina 38 8 920,377 10 1,048,746 2 20 No. Dakota 40 5 797,751 1 5,099 6 Ohio 41 13 1,017,509 7 738,188 2 22 Oklahoma 42 15 712,490 7 208,898 8 30 w Oregon 43 11 696,133 5 60,423 1 17 Pennsylvania 44 11 1,833,490 11 " Rhode Island 45 So. Carolina 46 14 809,601 6 229,953 1 21 So. Dakota 47 1 479,229 1 % Tennessee 48 34 1,898,609 1 200,000 7 42 3 Texas 49 27 1,367,991 12 910,938 3 42 :: x Utah 52 2 1,550 2 36,533 4 eH Vermont 53 Projects Total State Underobligations Overobligations fully number of Name Number Number Amount Number Amount obligated projects 5 !z Virginia 54 6. ,$ 1,269,819 1 $ 19,908 5 12 H Washington 56 8 454,802 1 6,440 9 West Virginia 57 9 1,138,372 2 11 Wisconsin 58 24 1,897,928 3 32,251 27 Wyoming 59 2 2,005 4 138,300 4 10 Puerto Rico 63 1 101 10 11 Virgin Islands -64 - - - .b Total 429 $28,398,364 --a/143 $9,367,279 =78 650 \ -a/Five of these projects exceeded the 50-percent maximum, stipulated in the authorizing legislation, by $20,955. APPENDIX II APPENDIX II GLOSSARY OF COLUMN HEADINGS ON LISTING -------------------------------------------------- OF PROJECTS BY STATE AND AMOUNT OF UNDEROBLIGATION AS COMPUTED BY ----------------------------------------------------- NATIONAL DEMONSTRATION WATER PROJECT ------------------------------------ CASE Sequence of project in listing. SEQNUM Same as CASE. PROJECT Number assigned to individual project. PURPOSE Purpose of project. A "1" indicates a water project, and a "2" indicates a waste disposal project. STATE Number identifying the State in which the project is located. (See app. I for corresponding State names.) PCNTMAX Percentage of maximum allowable grant. Amount of actual grant divided by amount of maximum allowable grant times 100. FHAG Total Agency grant. Actual amount of money that was granted to a project. DIFF Maximum allowable grant minus Agency grant. CALCl Maximum allowable grant as determined by the SO-percent rule. CALC2 Maximum allowable grant as determined by the l-percent rule. CALC3 Maximum allowable grant as determined by the similar community rule. 5 APPENDIX III APPENDIX III LISTING OF PROJECTS --------m---m------ UNDEROBLIGATED BY STATE, -----------------w--w-- PROJECT NUMBER, AND PROJECT NAME Project State a---- number ------ Project-------- name --- Alabama (1) 80 Northeast Ala. Water and Sewer and Fire 100 so. Marengo Co. Water & Fire Protection 180 Cullman County 160 Bakerhill Water and Fire Protection Auth. 220 Roupes Valley Water Authority 170 Spring Valley Water System 150 Curry Water Authority 140 Little Waxie Water Authority 50 Choctaw-Edna Water & Fire Protection 20 Greenpond Water System 250 Pickens County Water Sewer & Fire 190 V.A.W. Water System, Inc. 240 Smiths Water Auth. 70 No. Dallas Co. Water and Fire Protection 210 Big Wills Water & Fire Protection 120 St. Elmo-Irvington Water Authority 110 Kushla Water & Fire Protection Dist. 90 Rockwood Water Authority 40 Greenwood Water & Fire Protection 260 Northwest St. Clair Water System 60 Goodman Water & Fire Protection 30 Harrisburg Water Authority 29 APPENDIX III APPENDIX III Project State number Project name Arizona (2) 300 Twin City Water Works 280 Porter Creek Water Co. Inc. 310 S. Rainbow Valley Water Cooperative Arkansas (3) 580 Vilonia Waterworks ASSOC. 530 North White Co. Water Assoc. 460 Hughes Community Water Assoc. Inc. 500 New London Water Assoc. Inc. 360 Cleveland County Rural Water Assoc. 640 Town of Pottsville 490 Marysville Water Assoc. Inc. 510 Wesson Newell Water ASSOC. 590 Town of Cushman 600 Town of Flippin 480 Faircrest Water Assoc. 5960 Four Mile Hill Water Assoc. Inc. 350 Lake Chicot Water Assoc. 420 Long Lake Water Assoc. 430 Trumann Rural Water Assoc. 370 Kelso-Rohwer Water Assoc. 650 Felsenthal Water Assoc. 630 Standard-Umpstead Water Assoc. 390 Pleasant View Water Users Assoc. 570 Vanndale-Birdeye Water Assoc. Inc. 330 Bradley County Rural Water 520 City of Clinton 670 City of Lincoln 550 Poplar Grove Sewer Imp. Dist. #l 400 Mockingbird Hill Water Assoc. 440 City of Vandervoort 610 Town of Marie 470 Town of Fifty Six 30 APPENDIX III APPENDIX III Project State number Project name 660 City of Cotter 620 Town of Western Grove 340 Locust Bayou Water Corp. 560 Town of Lead Hill 380 City of Branch California (4) 860 Joshua Basin County Water Dist. 5990 Arrowbear Park County Water Dist. 900 Butte County Service Area No. 26 910 San Andreas Sanitary Dist. 870 Linden Co. Water Dist. 750 Inyo County Bishop AD #l 890 Allensworth Membership Water Co. 770 Mono County June Lake PUD #2 690 Riverdale PUD Imp. Dist. A Colorado (5) 5460 Town of Meeker 5490 Spring Canyon Water and Sanitation 5480 Orchard Mesa Sanitation Dist. 5560 Town of Milliken 5470 Archuleta Water Company 6190 Horseshoe Lake Sanitation Dist. 5510 Town of Seibert Connecticut (6) 5570 Town of Burlington 950 Town of New Hartford Florida (9) 980 West Hernando Water & Sewer Dist. 970 City of High Springs 1010 City of Umatilla 1000 Astor-Astor Park Water Assoc. 5580 Water and Sewer Dist. #2 Escambia Co. 31 APPENDIX III APPENDIX III % Project State number Project number Georgia (10) 1100 City of Palmetto 1120 Town of Lome Oak 1070 Town of Whitesburg 1040 City of Shellman 1180 City of Greenville 1160 City of Woodbury 1170 City of Demorest 1060 City of Kingsland 1110 City of Darien Illinois (13) 1250 Jersey County Rural Water co. Inc. 5410 Village of Stewardson 1370 Village of West City 1260 Fort Massac Water Dist. 1320 Village of Altona 1350 Village of Davis 5380 Village of Sparland 1360 Village of Tiskilwa 1310 Village of Cave in Rock 5390 Village of Plainville 1420 Village of Dieterich 1330 Village of Claremont 1340 Village of Strasburg 1290 Village of Xenia 5870 Town of New Canton 1270 Lick Creek Water Dist. 1280 Hoyleton Rural Water Co. 1375 Village of West City Indiana (15) 6060 Canaan Utilities Corp. 1440 Paxton Water Corp. 1430 South Harrison Water Corp. Iowa (16) 1490 Town of Coulter c 6260 Town of Fertile 1500 Town of Crystal Lake 6280 Town of Paton 1460 City of Delta 1510 Town of Rutland 1520 * .Town of Menlo Kansas (18) 1590 Rural Water Dist. No. 13 Jefferson Co. .32 APPENDIX III APPENDIX III Project State number Project name 1560 Rural Water Dist. No. 2 Barber Co. 1630 Rural Water Dist, #2 Pottawatomie Co. 1620 Rural Water Dist. #4 Neosho Co. 1570 Rural Water Dist. #l Cloud Co. 1600 Rural Water Dist. #4 Lyon Co. Kentucky (20) 1780 Wood Creek Water Dist. 1720 City of Stanton 1670 Bullock Pen Water Dist. 1810 Christian County Water Dist. 1750 City of Dry Ridge 1660 East Clark County Water Dist. 1790 Eliho-Rush Branch Water Assoc. Inc. 5590 City of Barlow 1740 Morgantown Road Water Dist. 1700 Rumsey Water Dist. 1650 North Barren Water Assoc, Inc. 1640 Allen County Water Dist. 1770 Rochester Water Dist. 1760 Logansport Dunbar Water System Inc. Louisiana (22) 1970 Village of Calvin 1870 Keatchie Water System Inc, 1930 Halfway Carroll Water System Inc. 1900 Village of Delta 1860 South Claiborne Water System Inc. 1840 Southeast Bienville Water System Inc. 1980 Mt. Zion Water System Inc. 1990 Walnut Bayou Water Assoc. Inc. 33 APPENDIX III APPENDIX III Project State number Project name 1910 Indian Village Water System Inc. 1830 Mt. Calm Water System Inc. 1820 Southwest Allen Parish Water 1920 Lena Water System Inc. 1940 Corney Water System Inc. Maine (23) 2030 Town of Wilton 2020 Limestone Water & Sewer Dist. Maryland (24) 2090 Lavale Sanitary Comm. 2060 Kent County Sanitary Dist. Inc. Michigan (26) 2130 Ottowa County 2140 Village of Mattawan Minnesota (27) 2250 Alexandria Lake Area Dist. 2210 Marshall Polk Water System 2350 City of Avon 2320 City of Isanti 2190 City of Taunton 2260 City of Nelson 2310 City of Harris 2230 City of Roscoe 2280 Oakland Sanitary Sewer Dist. #l 5880 City of Northome 2240 City of Backus 2330 City of Lynd 2340 City of Beardsley 2270 City of Freeborn 2290 City of Milroy 2300 City of Ellendale Mississippi (28) 5070 Northeast Itawamba Water Assoc. Inc. 2410 Central Yazoo Water Assoc. Inc. 34 APPENDIX III APPENDIX III Project number Project name New Jersey (35) 2720 Eqq Harbor Township Municipal Utilities New Mexico (36) 2780 Lower Valley Water Users Assoc. 5540 Southside Water Users Assoc. 2790 San Acacia MDWC Assoc. New York (37) 5900 Town of Ontario 5440 Town of Newfane Sewer Dist. #2 2840 Village of Deposit 5890 Village of Sylvan Beach 6160 Village of Walton 2820 Town of Boston North Carolina (38) 6360 Dare County 2910 Town of Blowing Rock 2865 Jackson Park Sanitary Dist. 2900 Perquimans County 6090 Bell Arthur Water Corp. 6370 Tyrrell County 6080 Hertford County 2890 Handy Sanitary Dist. North Dakota (40) 3000 Cass Rural Water Users Inc. 5950 Dakota Water Users Inc. 2990 Fort Lincoln Estates Coop. 2980 City of Dunn Center 2970 City of Dodge Ohio (41) 3010 Rural Lorain Co. Water Auth. 5630 Highland County Water Co. Inc. 5620 Village of West Union 6410 Scioto Water Inc. 3060 Village of Prospect 5610 Jackson County Water Co. Inc. 6400 - Switzer Water Assoc. Inc. 37 APPENDIX III APPENDIX III Project State number Project name 3080 Portage County Sewer Dist. No. 4 5640 Monroe Water Dist. 3150 Village of West Farminbgton 3050 Village of Vanlue 5650 Old Straitsville Water Assoc. 3030 Village of Beaverdam Oklahoma (42) 3190 RWD No. 8 McClain Co. 3180 Rural Water Sewer & Solid Waste Johnston Co. 5930 Rural Water Dist. No. 6 Mayes Co. 3350 Oklahoma Rural Water Inc. Kay Co. 3280 RWD No. 2 Woodward Co. 3290 Rural Water Sewer & Solid Waste Mgmt. #6 Grady Co. 3340 Dale Water Corp. 3240 Yale Rural Water Corp. 3320 Rural Water Dist. No. 2 Cotton Co. 3230 RWD No. 3 Pawnee & Payne 3300 Watts Public Works Auth. 5260 RWD No. 1 Cotton Co. 3330 RWD No. 2 Garvin Co. 3270 Kerr Water Dist. Seguoyah co. 3220 : Osage Public Works Auth. Oregon (43) 3530 Tri City Sanitary Dist. 3410 Depoe Bay Sanitary Dist. 3400 City of Canyonville 3500 Oceanside Water Dist. 3420 City of Union 5500 City of Brookings 3430 City of Glendale 3510 City of Stanfield 3440 Glide Water Assoc. 3480 Beverly Beach Water Dist. 3520 Reith Water Dist. 38 APPENDIX III APPENDIX III Project State number Project name 2450 Crooked Creek Water Assoce Inc* 5240 New Providence Water Assoc. Inc. 5210 Porterville Water Assoc. Inc. 5820 East Quitman Water Assoc. Inc. 5130 Three Forks Water Assoc, Inc. 2380 Monteray Water Assoc. Inc. 5150 Town of Tishomingo 2370 Evergreen Water Assoc, Inc. 5190 Acona Water Assoc. 5055 Nicholson Water & Sewer Assoc, Inc, 2430 Panhandle Water Assoc, Inc. 2390 Wayside Water Assoc. 5310 East Quitman Water Assoc, Inc. 2480 East Fernwood Water Assoc. Inc. 2500 Liberty-Plattsburg Water Assoc. 2400 Hiwannee Water Assoc. Inc, 2360 South Lake Water Assoc. Inc. 5120 Palmer Water Assoc. 5140 Harmony Central Water Assoc, Inc, 5060 New Salem Water Assoc. Inc. 5045 Holcomb Utility gist, 5100 New Candler Water Assoc, 2470 Northeast Perry County utility 5230 Town of Falkner 5180 Atlanta Water System Inc. 5220 Village of Gattman 2420 Choctaw Water Assoc, Inc, 5170 Town of Rienzi 35 APPENDIX III APPENDIX III Project State number Proiect name 5090 Denmark Water Assoc. 2440 Beat III Greene Co. Water System Inc. 5110 Polkville Water Assoc. 5200 C b M Waterworks Assoc. Inc. 2460 51 55 Water Assoc. Inc. 5040 Holcomb Utility Dist. Missouri (29) 5430 Public Water Supply Dist. #l Cedar Co. 2590 City of Malta Bend 6000 Public Water Supply Dist. No. 3 Vernon Co. 2540 City of Graham 2520 Public Water Supply Dist. #6 Stoddard County Montana (31) 6025 Ashland County Water and Sewer 6020 Ashland County Water and Sewer 6145 Basin County Water and/or Sewer 5365 Carter-Chouteau County Water Nebraska (32) 2690 Rural Water Dist. No. 3 Otoe Co. 2670 Rural Water Dist. No. 1 Dawes Co. 2680 Little Blue Natural Resources Dist. 2620 Village of Diller 2710 Village of Dubois 2700 Village of Anselmo 2630 Village of Merriman 2600 Rural Water Dist. No. 2 Boyd Co. 2640 Village of Hayes Center 2660 Village of McLean 2610 Village of Spencer 36 APPENDIX III APPENDIX III Project State number Project name Pennsylvania (44) 6450 Gen. Mun. Auth. Boro. of Harveys Lake 3580 Windsor Township Municipal Auth. 3570 Worthington Municipal Auth. 3560 Mountain Water Assoc. 5810 Boro. of Wellsville Municipal Auth. 6440 North Lebanon County Auth. 6420 Millersburg Area Auth. 5800 Point Township Sewer Auth. 5830 Connoquenessing Borough Auth. 6430 Royalton Borough Auth. 6460 Lake Meade Municipal Auth. South Carolina (46) 3660 Darlington County Water & Sewer Auth. 3590 Beaufort-Jasper County Water 3650 Chesterfield Co. RR Water co. Inc. 5250 Daniel Morgan Rural Community 3690 Wallace Water Co. 5750 Town of Varnville 5720 Meansville-Riley Road Water Co. Inc. 5680 Trico Water Co. Inc. 3670 Marlboro Water Co. Inc. 5710 Bull Swamp Rural Water Co. Inc. 3680 Marlboro Water Co. Inc. 5740 Town of Brunson 3630 Grassy Pond Water Co. Inc. 3620 Goucher Water Co. Inc. South Dakota (47) 3700 Randall Community Water Dist. Tennessee (48) 3850 Cumberland Utility Dist. 3900 Tow11 U; Pig Sandy 3940 Arthur Shawanee Utility Dist. 3860 City of Barlett 39 APPENDIX III APPENDIX III Project State number Project name 3960 Cross Anchor Utility Dist. 3760 First Utility Dist. of Hardin Co. 3930 City of Dunlap 4040 Elbridge Water Assoc. Inc. 3780 Lincoln Co. Board of Public Utilities 4090 Tri-Cities Sullivan Utility Dist. 4000 City of Savannah 5980 Dekalb Utility Dist. 4080 Tri-Cities Sullivan Utility Dist. 3870 Fall Branch Utility Dist. 3800 Town of Adamsville 4110 HB & TS Utility Dist. 4020 Town of Puryear 3910 Utility Dist. of Southwest Bedford 3750 Town of Monteagle 4100 Town of Spencer 4030 Pleasant Valley Utility Dist. 3890 Laguardo Utility Dist. 3970 North Greene Utilities Inc. 5970 Dekalb Utility Dist. 4070 Northeast Robertson Utility Dist. 3950 County Wide Utility Dist. of Crockett Co. 3990 Town of Hornsby 3880 City of Collinwood 3920 West Warren Utility Dist. 3730 City of Cumberldnd Gap 4050 Town of Byrdstown 5910 Town of Bell Buckle 3770 Town of Hohenwald 4060 Wolf Branch Utility Dist. Texas (49) 6550 Manville Water Supply Corp. 6510 Bi County Water Supply Corp. 40 APPENDIX III APPENDIX III Project State number Project name 4150 Zephyr Water Supply Corp. 4380 Consolidates Water Supply Corp. 6540 City of Nome 6520 Red River Auth. of Texas 4410 Southwest Milam Water Supply Corp. 4280 Tempe Water Supply Corp. 6490 Dobbin Plantersville 4240 North Milam Water Supply Corp. 4140 Mustang Valley Water Supply Corp. 4130 McCoy Water Supply Corp. 4340 Callisburg Water Supply Corp. 6480 Birome Water Supply Corp. 4330 Coleman County Water Supply 6530 Maloy Water Supply Corp. 4250 Men Water Supply Corp. 4390 Rock Hill WSC 4260 Wildorado Water Supply Corp. 4270 Damascus-Stryker Water Supply Corp. 4400 Salem Elm Ridge Water Supply Corp. 4300 El Sauz Water Supply Corp. 4310 Sharon Water Supply Corp. 4420 North Runnels Water Supply Corp. 4320 Bell Milam Falls Water SUPPlY 4370 Tri-County Water Supply Corp. 4160 Westbound Water Supply Corp. Utah (52) 4470 Town of Cannonville 4481) Town of Woodruff Virginia (54) 5860 Buchanan County Public Service 41 APPENDIX III APPENDIX III Project State number Project name 5840 John Flannagan Water Auth. 6185 Dinwiddie County Water Auth. 5300 Town of Virgilina 5330 Town of Fincastle 5290 Pulaski County Public Service Washington (56) 4540 Liberty Lake Sewer Dist. 4600 Town of La Conner 4570 Steptoe Sewer Dist. #l 4520 Hockinscn Water Assoc. Inc. 4580 Wallula Water Dist. #l 4530 Town of Hartline 4550 - Town of Spangle 4560 Walla Walla Water Dist. #2 West Virginia (57) 6570 City of Shinnston 4650 Lincoln Public Service Dist. 4670 Raleigh County Airport Auth. 4700 Mountain Top Public Service Dist. 4690 Lynco Public Service Dist. 4680 Clay Battelle Public Service 4620 Town of Kermit 4610 Chestnut Ridge Public Service Dist. 4640 Silverton Public Service Dist. Wisconsin (58) 4790 Town of Norway Sanitary Dist. 6600 Village of Lake Nebagamon 4800 Poy Sippi Sanitary Dist. 4780 Oakdale Sanitary Dist. 4750 Sand Creek Sanitary Dist. #l 4770 Village of Endeavor 4740 Village of Wyocena 42 APPENDIX III APPENDIX III Project State number Project name 4825 Stone Lake Sanitary Dist. 4870 Town of Lyndon Sanitary Dist. 6640 Village of Curtiss 6580 Drummond Sanitary Dist. 4760 Village of Ridgeway 4835 St. Joseph Sanitary Dist. #l 4710 Village of Wheeler 4840 Ashippun Sanitary Dist. 6645 Village of Curtiss 4830 St. Joseph Sanitary . Dist. #l 4860 Town of Kossuth Sanitary Dist. 6610 Jamestown Sanitary Dist. #3 4820 Stone Lake Sanitary Dist. 4810 Blenker-Sherry Jnt. Sanitary Dist. 4730 Sanitary Dist. No. 1 Town of Lakeland 6585 Drummond Sanitary Dist. 4720 Town of East Troy Sanitary Dist. Wyoming (59) 5780 Town of Marbleton 5775 Sunburst Water & Sewer Dist. 43 APPEN3IX IV APPENDIX IV UNITED STATES DEPARTMENT OF AGRICULTURE FARMERS HOME ADMINISTRATION WASHINGTON. D.C. 20250 Mr. John Landicho May 27, 1977 Associate Director Community and Economic Division U.S. General Accounting Office Washington, DC 20548 Dear Mr. Landicho: This is in reply to your letter of April 25, 1977, concerning your recent analysis of the Farmers Home Administration (FmHA) water and waste disposal grant program. You indicated that of the 650 projects receiving grants in fiscal year 1976, 429 were funded at less than the maximum amount allowable by law and FmHA regulations. You ask whether FmHA would be willing to make adjustments on those projects that were underfunded, where it is legally permissible to do so. We are opposed to retroactively adjusting the grant amounts for those projects covered by your analysis for the following reasons: 1. Although the basic methodology and protocol used in the analysis resulted in the computation of a grant amount based strictly on a mechanical calculation, we do not believe consideration was given to the matter of priorities. FmHA regulations provide that State Directors will establish priorities for funding of applications based on the applications on hand and the availability of funds from the States' allocation. FmHA regulations do not require that the "maximum allowable grant" be made in every case. Also, there are other factors that affect the final determination of grant amount such as the availability of funds from other sources. 2. In a major portion of the cases covered by the analysis, the difference between the actual grant made and the "maximum allowable grant" as computed during the analysis is not substantial enough to warrant adjustment. Such a small increase in grant amount would not have a significant impact on the user payment for those users being served by the project and receiving the benefits of the grant. The basic goal of the program is to reduce user payments to a reasonable level for farmers, ranchers, rural residents, and other eligible rural users. We believe that after considering all funding on the projects covered by the analysis, this goal has been accomplished. 44 APPENDIX IV APPENDIX IV 3. Such a retroactive adjustment could set a precedent that'would be difficult to change. By adjusting the grants for certain grant recipients covered by the analysis, other recipients may rightfully demand equal treatment. This could set in motion a process that could run for an undeterminable amount of time. To attempt to retroactively construct all the circumstances surrounding the negotiations between the recipient and FmUA at the time the grant offer was tendered and accepted by the grantee would be a difficult and time-consuming process. Project funding was based on full consideration of all the circumstances that existed at the time the grant was approved. All parties, including the applicant, agreed that a reasonable user cost had been achieved. We believe that it would place an unreasonable administrative burden on the Agency's resources to attempt such an adjustment. Our foremost concern is that the benefits of the program be fairly and equitably distributed to all eligible communities desiring our assistance. We believe that our present grant program is being administered in such a manner. Sincerely, DENTON E. SPRAGUE Acting Administrator 45 Copies of GAO reports are avarlable to the general public at a cost of $1.00 a copy. 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Farmers Home Administration Use of Grant Funds for Water and Waste Disposal Systems
Published by the Government Accountability Office on 1977-08-17.
Below is a raw (and likely hideous) rendition of the original report. (PDF)