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<br />0369 <br /> <br />. <br /> <br />. <br /> <br />because the management of the repayment process is more' than <br />simply the determination of the cost of a project and the <br />selection of an amortization schedule. There are many other <br />questions that must be answered in order to determine <br />reimbursement obligations of non-Federal entities. What is the <br />interest rate to be used for repayment? Should interest be <br />accumulated using a simple or compound formula? What is the <br />appropriate length of the repayment period? Can repayment <br />contracts be renegotiated? If so, how frequently? <br /> <br />These and other assumptions must be made in order to <br />determine the water and power rates that are necessary to meet <br />annual repayment requirements. The Inspector General found <br />that the assumptions used by DuRec were often biased toward the <br />beneficiaries and frequently led to the setting of rates that <br />are too low to accomplish timely repayment. <br /> <br />Inspector General Audit Activity <br /> <br />The Office of the Inspector General for the Department of <br />the Interior is a position appointed by the President and <br />intended to be independent of the Secretary. Prior to its <br />establishment by the Inspector General Act of 1978, the IG's <br />audit activities were performed by an Office of Audit and <br />Investigation within the Interior Department. June Gibbs Brown <br />was named the first Inspector General, and held that position <br />until being terminated by President Reagan in his controversial <br />firing of all the Inspectors General in January 1981. Brown <br />was subsequently reappointed by the President to be Inspector <br />General for the National Aeronautics and Space Administration. <br /> <br />Richard Mulberry was named by the President as Brown's <br />successor. Mulberry was a partner in the Denver-based <br />accounting firm of Elmer Fox & Company, operating out of the <br />firm's Dallas office. At the time, Secretary \/att said of <br />Mulberry: <br /> <br />Dick Mulberry has the experience in auditing necessary <br />to understand the complicated accounting systems <br />associated with this Department's varied activities, <br />and he has the toughness of mind to follow through on <br />an~ evidence of wrongdoing, waste or inefficiency.~1 <br /> <br />A couple of interrelated events led up to the publication <br />of the seven audits of Reclamation project accounts that are <br />the subject of this report. In the last year of the Ford <br /> <br />~/u.s. Department of the Interior, "Richard Mulberry will <br />be Interior Inspector General," News release, June 1981. <br /> <br />3 <br />