oversight

Corps of Engineers and Bureau of Reclamation: Information on Potential Budgetary Reductions for Fiscal Year 1998

Published by the Government Accountability Office on 1997-04-25.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community,   and
      Economic Development    Division

      B-276660



      April 25, 1997


      The Honorable Pete V. Domenici
      Chairman
      The Honorable Harry Reid
      Ranking Minority Member
      Subcommittee on Energy and
       Water Development
      Committee on Appropriations
      United States Senate

      The Honorable Joseph M. McDade
      Chairman
      The Honorable Vie Fazio
      Ranking Minority Member
      Subcommittee on Energy and
       Water Development
      Committee on Appropriations
      House of Representatives

      Subject: Corns of En gineers and Bureau of Reclamation: Information    on
               Potential Budgetarv Reductions for Fiscal Year 1998

      As requested, we are providing the information (see enc. I) that we discussed
      with your offices on April 11, 1997, about our examination of certain budget
      accounts of the Department of the Army’s Corps of Engineers (Civil Programs)
      and the Department of the Interior’s Bureau of Reclamation. The Congress
      funds the activities of both agencies through the Energy and Water
      Development Appropriations.     The information we are providing includes
      trends in the agencies’ carryover balances and potential reductions to their
      fiscal year 1998 funding requests to reflect the carryover balances expected at     _




                                                         GAOLRCED-97-131R Budget Issues
                                                                           -,;
B-276660

the end of fiscal year 1997.’ In addition, we identified funds that the Corps
had available in the general expense account to implement its plan to
restructure division offices. At the Bureau, we identified funds for a new
initiative (Bay-Delta Ecosystem Restoration) for which the estimated fiscal
year 1998 outlays are expected to be less than the request for budget authority.

The Corps has significantly reduced its unobligated carryover balances. For
example, between fiscal year 1994 and the end of fiscal year 1996, the Corps
reduced unobligated carryover balances in the construction general account
from $538 million to about $181 million. A number of factors contributed to
the reductions experienced by the Corps, including the periodic review of
estimated fiscal year obligations and the ability to reprogram funds. However,
we identified a total of almost $5.3 million in unobligated carryover balances in
the general investigations and construction general accounts that could
potentially be used to reduce the Corps’ fiscal year 1998 funding request. The
unobligated balances resulted in part because the Corps determined that some
projects were not feasible or because the Corps was not able to identify
nonfederal sponsors to share the costs of the projects.

On April 1, 1997, the Corps implemented a plan to reorganize its division
offices. Although the Corps has at least $4.25 million available to implement
the restructuring plan, it will not know for several months how much
implementing the plan will cost.

Similarly, the Bureau has taken various actions to manage its carryover
balances, including incorporating such balances into budget requests and
periodically reviewing and transferring funds among projects. Nevertheless,
we identified $25.1 million in carryover balances and $93.3 million in funding
from Bay-Delta that could potentially be used to reduce the Bureau’s fiscal
year 1998 funding request. The potential reductions resulted partially because
projects were delayed for environmental studies and other reasons. For
example, the Bureau has not completed the environmental impact statement
for one project. In another case, the Bureau set up a reserve to purchase
water during times of drought; however, the Congress has never been informed
that funds would be used for this purpose.




 ‘For the purposes of this report, we define carryover balances as the total of
 ending unobligated balances and undelivered orders. Undelivered orders are
 goods and services that have been ordered and obligated but that have not
 been received.

 2                                                   GAO/RCED-97-131R Budget Issues
B-276660

AGENCY COMMENTS

We provided a draft of this report to the Assistant Secretary of the Army (Civil
Works) and Department of the Interior for their review and comment. In
commenting on the draft, the Assistant Secretary of the Army (Civil Works);
the Commander, U.S. Army Corps of Engineers; the Assistant Secretary of the
Interior for Water and Science; and the Bureau’s Chief, Program Budget and
Liaison Group, agreed with the accuracy of the information but offered
clarifications of the status and funding of certain projects. In addition, the
Staff to the Assistant Secretary of the Interior for Water and Science disagreed
with the $118.4 million in potential fiscal year 1998 budget reductions that we
identified for the Bureau.

The Fiscal Programs Management Officer, Office of the Assistant Secretary of
the Army for Civil Works; Chief, Budget and Programs Division; Chief,
Program Formulation and Evaluation Branch; and other Corps officials agreed
that about $5.3 million for four general investigations and five construction
general projects was no longer needed or unlikely to be spent. They noted,
however, that since the Congress had earmarked funds for the nine projects,
the agency cannot use the funds for other purposes until the Congress
authorizes it to do so.

Concerning the division restructuring plan, Corps officials said that they do not
expect to receive implementation plans from the division offices until May 2,
1997. Although the Corps will not have cost and savings information on the
restructuring until after it receives the division offices’ inputs subsequent to
implementing the plan, these of%&& said that they expect the costs to be
relatively minor and the savings to be very little, since savings had been
achieved through the personnel reductions, office consolidations, and
streamlining that occurred over the last several fiscal years. They also said
that at least $4.25 million would be available to implement the restructuring
plan and that additional costs, if any, will be financed fiorn available general
expenses account funds. They added that the Corps does not expect to
request any additional funds for restructuring.

The Staff to the Assistant Secretary of Interior for Water and Science; the
Chief, Program Budget and Liaison Group, and other departmental and Bureau
officials disagreed with the potential fiscal year 1998 reductions that we
identified. They took the position that all of the funds identified in our five
proposals (1) would be either expended on other activities within the project
or transferred to other projects or (2) were necessary for the long-term
funding of the projects. In particular, they noted that although the Congress


3                                                   GAOLRCED-97-131R Budget Issues
                                                                                    ..:.
B-276660

may not have specifically earmarked funds appropriated from the Central
Valley Project Restoration Fund to set up a reserve to purchase water during
times of drought, the reserve falls within the scope of what the Bureau can use
the funds for and represents good management of available resources. Jn
addition, they said the fact that the estimated outlays from the Bay-Delta
account in fiscal year 1998 are less than the fiscal year 1998 request for budget
authority is not a reason to provide less than the requested amount because,
for example, outlays frequently can occur months or years after the obligation
of budget authority, particularly in accounts like the one for Bay-Delta that
primarily finance construction and land acquisition. Although the Bureau
officials with whom we met believe the agency can obligate the $118.4 million
in fiscal year 1998, ultimately the Congress will decide how the Bureau should
 use these funds.



At the Corps, we obtained information on aggregate and project-specific
carryover balances and expenditures within the general investigations and
construction general accounts as well as the agency’s planned division
restructuring to be funded from the general expenses account. At Interior, we
obtained information on carryover balances and expenditures for
projects/activities within the Bureau’s construction and operation and
maintenance accounts, the Small Reclamation Projects loan program, the
Central Valley Project Restoration Fund, and the California Bay-Delta
Ecosystem Restoration program as well as withm Interior’s Central Utah
project. Due to time constraints, we did not develop aggregate information on
these carryover balances and expenditures. We performed our work from
 October 1996 through March 1997 in accordance with generally accepted
 government auditing standards.

We are sending copies of this report to the Secretary of the Army; the Chief,
U.S. Army Corps of Engineers; the Secretary of the Interior; the Commissioner
of the Bureau of Reclamation; the appropriate congressional committees; and
other interested parties. We will make copies available to others upon request.            -.




 4                                                   GAO/RCED-97-131R Budget Issues
B-276660

If you or your staff have any questions about this report, please c&U me at
(202) 512-3841. Major contributors to this report were Alan Bennett, Brian
Eddington, Mary Ann K~.~slicky, and Jonathan Kusmik.




Enclosure




                                                    GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                         ENCLOSURE I




                   PRESENTAmON SLIDES




~~40 Resources, Community, and Economic
     Development Division

        CORPS OF ENGINEERS AND
        BUREAU OF RECLAMATION

        Information on Potential Budgetary
        Reductions for Fiscal Year 1998




 6                                      GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                          ENCLOSURE I




MO       Corps of Engineers



     l       Scope
         l    General Investigations account
         l    Construction General account
         l    General Expenses account (Division
              Restructuring Plan only)




7                                      GAOLRCED-97-131R Budget Issues
ENCLOSURE I                                            ENCLOSURE I-




w           Corps of Engineers


        l       Corps has reduced unobligated carry-
                over balances between fiscal year 1994
                and the end of fiscal year 1996
            0 General Investigations from almost $60
              million to about $20 million
            l    Construction General from $538 million
                 to about $181 million




                                                                           :.

    8                                     GAO/RCED-97-131R Budget Issues
   ENCLOSURE I                                                                                         ENCLOSURE I




GM                    Corps of Engineers

 Trends in Carryover, Costs, and                           Trends in Carryover, Costs, and
 Budget Authority (BA) for General                         Budget Authority (BA) for Construction
 Investigations Account                                    General Account
$ in (000)                                               $ in (000)
250,000
               l-
                                                         1.400.000
                                                                         r




100.000        -




          0’ ’                           1           I
           N94                        N95          N96               -N94                       N95                     N96
           -        Unobligated balance                               H      Unobligated balance
                    Undelivered orders                                       Undelivered orders
          #         Costs (accrued expenditures)                     #       Costs (accrued expenditures)
           m        New BA                                           M       New %A’

                                                               %cludes new budget authority from the Inland Waterways
                                                                Trust Fund: N94-$134,446, N95-$54,509. and
                                                                N96-$56,750.




    9                                                                              GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                             ENCLOSURE I




w            Corps of Engineers


         l   Potentially excess funds
              l   General investigations - 4 projects
                  totaling $2.4 million
              l   Construction General - 5 projects
                  totaling $2.9 million
              l   All these funds are earmarked for
                  specific projects




    10                                     GAOLRCED-97-131R Budget Issues
ENCLOSTJRE I                                            ENCLOSURE I




GM      Corps of Engineers


        l       Division Reorganization Plan
            l    Fiscal year 1998 budget request based
                 on earlier plan; justification based on
                 current plan
            l    Cost and savings information will not be
                 available until after implementation
            l    At least $4.25 million available to
                 implement plan




11
                                          GAOLRCED-97-131R Budget Issues
ENCLOSURE I                                          ENCLOSURE I




w            Bureau of Reclamation


         l     Scope: Selected activities from the
             l Construction account

             l Operation and Maintenance account

             l Central Valley Project Restoration Fund

             l Small Reclamation Projects Loan

                program
              l California Bay-Delta Ecosystem

                Restoration program
              l Central Utah project (Interior)




    12                                  GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                           ENCLOSURE I




w             Bureau of Reclamation


     l       Bureau has taken various actions to
             manage its carryover balances:
         l    Incorporate such balances in budget
              request
         l    Periodically review projects’
              implementation/expenditures and
              transfer excess funds




13                                      GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                          ENCLOSURE I




w            Bureau of Reclamation


         l   Bureau justified most of the fiscal year
             1996 carryover balances that we
             reviewed
         l   Nevertheless, reductions totaling $118.4
             million could be applied to the fiscal year
             1998 budget request




    14                                   GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                           ENCLOSURE I




G+U Bureau of Reclamation


        l       Construction
            l    $3.9 million from the San Gabriel
                 Basin project
            l    $2.8 million from the Animas LaPIata
                 project
        l       Central Valley Project Restoration Fund
            l    $14 million allocated for a Water
                 Acquisition Reserve within this fund




 15                                     GAO/RCED-97-131R Budget Issues
ENCLOSURE I                                          ENCLOSURE I




GA0 Bureau of Reclamation


         l       Small Reclamation Projects loans
             l    $4.4 million from the Tohono
                  O’Odham Nation--Schuk Toak loan
         l       Bay-Delta Ecosystem Restoration
             l    $93.3 million




  (140546)

 16                                      GAO/RCED-97-131R Budget Issues
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