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<br /> <br />United States Department of the Interior <br /> <br />BUREAU OF RECLAMATION <br />WASHINGTON, D,C, 2024D <br /> <br />APPENDIX 3 <br />Page I 0 f S <br /> <br />IN REPLY <br />IlEFEIl TO, <br /> <br />0-1200 <br /> <br />MAR 16 1989 <br /> <br />Memorandum <br /> <br />From: <br /> <br />Assistant Inspector General for Audits <br />/) .'.'\ <br />Conmissioner"I' ^. ' <br />, / /) 'Y. '-.. f ., j ./ ,_ /( :::. I <br />'- '-- ~ - '- >.,.- ~ -<-- . - - "- <br />Requested Comments on Draft Audit Report "Review of the Timely <br />Recovery of Irrigation Investment Costs - Colorado River Storage <br />Project" (W-WS-BOR-14-88Al (Audit) <br /> <br />To: <br /> <br />Subject: <br /> <br />We have reviewed the subject draft report for both its proposed <br />recommendations and factual content, Provided below are our comments on the <br />two recommendations contained in the report. <br /> <br />Recommendation No.1 - Revise the irrigation assistance repayment policy for <br />the COlorado River storage Project to require recovery of the interest-free <br />irrigation assistance in equal annual installments over the individual <br />participating project repayment periods. <br /> <br />Response - We cannot comply with this recommendation since its implementation <br />1S contrary to the provisions of the Act authorizing the Colorado River <br />Storage Project, (Act of April II, 1956, 70 Stat. I05) , That Act provides <br />that payments for participating project irrigation from power revenues cannot <br />be made until all costs applicable to Section 5(c)(1) and Section 5(d) [i.e., <br />operation, maintenance, and replacement costs, and repayment of all costs <br />allocated to each storage unit] have been repaid, The recommendation requires <br />concurrent amortization of both storage units and participating projects, and <br />therefore, would require new legislation to be implemented. In addition, <br />there are other considerations related to technical computations that have <br />apparently been overlooked; these are detailed in comment number one of <br />Attachment A, <br /> <br />Recommendation No, 2 - Require the Bureau to analyze any proposed legislative <br />Changes to the funding or repayment of the Bonneville Unit to determine their <br />financial impacts on the U.S, Treasury and report the results to the Secretary <br />and the Congress, <br /> <br />Response - We concur with this recommendation. I will instruct the Regional <br />Director of the Upper Colorado Region to perform any necessary analysis and <br />provide comments on draft legislation, as appropriate to implement this <br />reconmendation, <br /> <br />11 <br />