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<br />. .~'-~. ,-'-, <br />,~ ,,~ ",' t' <br />~.,..,. ~,." <br />-3,7' ,.' ,....;0--. :.....\ <br />': ,... --.. . . ,....\ <br />:.'~.~t-;'i <br />^ ~. ,10,/ <br />?\ >::t' <br />~,\ -~"----. '. '/ <br />--'.,:" ". / <br />'1"'1}~" <br /> <br /> <br />United States' Department of the Interior <br />OFFICE OF THE SECRETARY <br />WASHINGTON, D,C, 20240 <br /> <br />. i ~ <br /> <br />Sf? 2.9 IS80 <br /> <br />'., <br /> <br />Memorandum <br /> <br />To: <br /> <br />The Secretary <br /> <br />From: <br /> <br />Inspector General <br /> <br />Subj~t: <br /> <br />Audit Report, "Review of Colorado River Storage Project <br />and Related Individual Participating Projects, Water and <br />Power Resources Service" <br /> <br />The enclosed report represents part of a series of audits conducted in response to audit <br />requirements included in the President's memorandum of July 12, 1978, on <br />"Conservation Pricing of Water Supplied by Federal Projects." <br /> <br />Our overall assessment is that the Water and Power Resources Service (Service) <br />management practices are generally sound and that timely repayment of the Federal <br />investment in storage project and participating project facilities will be accomplished. <br /> <br />The report, however, identifies two major issues which, if not resolved, could <br />materially aifect the project's financial condition in future years. <br /> <br />The first unresolved issue pertains to a contract ceiling on the amount of costs the <br />Cemral Utah Water Conservancy District (CUWCD) is currently required to repay for <br />the Bonneville Unit of the Central Utah Project. Under its contract with the Federal <br />Government, CUWCD's repayment ceiling for ;\11&:1 water investment costs is about <br />$198 million less than it should be. The need for timely resolution of this issue is <br />pressing as the Service estimates that incurred construction costs will exceed the <br />existing contract ceiling during fiscal year 1981. <br /> <br />The Service advised us that it intends to execute some form of repayment contract <br />with CUWCD prior to commitment of construction funds in excess of the contract <br />ceiling. <br /> <br />The magnitude of the increase in reimbursable costs, the potential for problems <br />associated with executing a new or amendatory contract, and the timing constraints <br />are such that specific actions should be taken while the Service is deciding the type of <br />repayment contract it will execute. In this regard, we recommend the following: <br /> <br />1. Advise the District of the specific date by which it must execute an <br />amended or new repayment contract which in addition to other <br />matters insures full repayment by water users of reimbursable Federal <br />investment costs. <br /> <br />