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090834 1 (1980-08-19)

handle is hein.gao/gaobacuch0001 and id is 1 raw text is: -. - -, * 4 0 %- .,. -- 0. 0 '4 q~ ,, ,4 ClOM8IEty A1N0CCONOMIC ydEVEOr eN( OIION 0 'V UNITED STATES GENIAL AC§OUNTING OFFICE S WASHINGTON, D.C. 20$48 9 6:) v 'I * ft U ji VA 4' I L's) Ii 4 ii I fr. *FranI;11lis Senior Staff Assistant for Contracts and Repayment Water and Power Resources Service Main Interior Qldg.- Room 7413 18th and C'Street, NW Washington, DC 20240 Dear Mr. Ellis: The U.S. General Accounting Officr' has initiated a review adJresin9 hater and Power Resource'. 'ervics contracting and repayment practices, ,Durin .1this cvi e, wc have identified practices aund/or policies which I v'cOld like to hve clarified. Shcown below tire a serIes of qucstions or statements which we feel are Pertinent to our revie; f fort. Your cooper'.tion and assistanice in addressing them wialti he greatly appreciate,. 1. Interest rates. 9 A I understand flesources Servicie sets the interest on capital costs at the rate when construction startis. What constitutes start of construction? Does Resourccs Worvice calculate interest during construction as simple interes' or compound interest? What decision, if any, has been made to use the treasury.rate versus the 3.5 percent rate (i.e., outcome of 1979 1 Report recommendation)? Why? Are there any Resources 'Service! wter contracts with interest rates above 3.5 percent? Is the 3.5 percent ceiling realistic in today's world? 2. Adiinistrative costs.. Each region appears to be handlin'i water marketing 'charges or administrative costs diffc'rently. What. is the authority\Or policy related to administrative charpes? What standdrd criteria or hase mbkes up the administrative expw se? How long has Resources Service been charging it au.d what. if..anythinq, xisted bufore it? ) ( *'~X ' ~ N; A) (1 BEST DOCUMENT AVAILARIE I -% I.. .4,414 '' x¼ci &4) i . O(ao- I , I ON -3 fr94~9r2 1% I a I

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