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<br />INTRODUCTION AND SUMMARY <br /> <br />The Office of Inspector General has made an audit of selected activities of the <br /> <br /> <br />Colorado River Storage Project (CRSP) and related individual participating proj- <br /> <br /> <br />ects. In this report CRSP refers to the four main project storage units and the <br /> <br /> <br />participating projects collectively. <br /> <br />The primary purpose of the audit was to evaluate the financial condition of CRSP <br />and its ability to meet future annual operating and interest costs and to satisfy its <br />repayment obligations under law for Federal investment in hydroelectric power, <br />irrigation, and municipal and industrial (M&:I) water supply facilities. <br /> <br />In addition to other matters, this report discusses the power marketing functions <br /> <br /> <br />which became the responsibility of the Department of Energy (DOE) on October 1, <br /> <br /> <br />1977. Because the specific areas of responsibility between Interior and DOE have <br /> <br /> <br />not been fully defined, action on one of our recommendations may require <br /> <br /> <br />coordination between the two departments, while action on other recommendations <br /> <br /> <br />will be solely Interior's responsibility. <br /> <br />Subject to the matters discussed herein, our overall assessment is that the region's <br /> <br /> <br />management practices relative to meeting past and future repayment obligations <br /> <br /> <br />are generally in accord with sound business practices. I\nd, if adequate power <br /> <br /> <br />rates are implemented and maintained in a timely manner, the short- and long- <br /> <br /> <br />range overall financial condi cion of the project, in our opinion, will be sound. <br />