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<br /> <br />not applying this policy to repayment contracts is illustrated by the aforemen- <br />tioned irrigators' ability to pay for the BU where the irrigators' $16.~ million <br />ability to pay set forth in the 1965 repayment contract with CUWCD has increased <br />to $69 million as of 1978. As explained in this report, regional officials expressed <br />several concerns over the validity of using the $69 million figure as a basis for <br />concluding that periodic recalculations should be made. The need, however, for <br />appropriate contract provisions for periodic recalculation and renegotiation of <br />irrigators' ability to pay is evidenced by the fact that dramatic increases can <br />occur. <br /> <br />We recommend that the Commissioner address this matter and require all new or <br /> <br /> <br />amendatory repayment contracts to include provisions for periodic rate adjust- <br /> <br /> <br />ments based upon irrigators' ability to pay without an allowance for contingencies. <br /> <br /> <br />For existing contracts, we recommended that the region be alert to incorporating <br /> <br /> <br />such provisions when and if opportunities to reopen the existing contracts material- <br /> <br />ize. <br /> <br />The Assistant Secretary, Land and Water Resources, responded to our draft report <br /> <br /> <br />on August 12, 1980. Except for the issues concerning the CUWCD contract ceiling <br /> <br /> <br />and the method of apportioning storage project revenues, the actions contemplated <br /> <br /> <br />by WPRS should satisfactorily resolve the issues discussed in the report. <br /> <br />The report also contains a section on our review of the region's accounting system, <br /> <br /> <br />related internal controls, and CRSP financial statements. Our review of the <br /> <br /> <br />accounting system and related internal controls, as well as selected testing of <br /> <br />5 <br />