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088499 1 (1983-07-19)

handle is hein.gao/gaobacuwm0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 RESOURCES, COMMUNITY, AND ECONOMIC DEVELOPMENT DIVISION July 19, 1983 The Honorable William R. Gianelli Assistant Secretary of the Army (Civil Works) Dear Mr. Gianelli: Subject: Opportunities to Increase Operation and Maintenance.Cost Recovery on Water Projects In our August 7, 1981, report entitled Changes in Federal Water Project Repayment Policies Can Reduce Federal Costs (CED-81-77), we pointed out,,among other things, that the Army Corps of Engineers uses original water project cost allocations to charge reservoir users for operation and maintenance (O&M) costs even when current use is different from the original cost allocation. To achieve more equitable O&M cost recovery from current project users, we recommended that the Secretary.of the Army establish policies that would require all project purposes to share, in accordance with actual reservoir uses, in O&M expenses. On October 5, 1981, you responded that our recommendations were being considered as part of an overall study of water , supply cost recovery/repayment and that such a study would take several months to complete. Also, you added that decisions on appropriate remedial measures would follow. During our recent review of the O&M cost recovery subject, we identified additional examples of Corps' water projects that further support the need to reallocate O&M costs on a current- use basis. Although reallocating costs on a current-use basis would help provide for the recovery of future O&M costs incurred on these projects, it will not affect recovery of past mainstem Missouri River project irrigation O&M costs incurred and unre- covered, which now total about $25 million. The Corps needs to determine the extent to which these past costs can be recovered and take appropriate action. OBJECTIVE, SCOPE, AND METHODOLOGY Our overall objective was to determine for four water resource projects the extent to which the Corps' O&M cost recov- ery systems since our 1981 report assured fair and timely cost recovery from Federal water project users, in accordance with 17 (085629) 088499

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