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<br />0370- <br /> <br />. <br /> <br />. <br /> <br />Administration, the OAI undertook reviews of the balance sheets <br />of two large basin accounts, the Pick-Sloan Missouri Basin <br />Program and the Central Valley Project. This work was intended <br />to test whether it was cheaper to perform financial audits <br />in-house or to contract out for such services. During the <br />course of these reviews, however, the OAI uncovered major <br />policy issues with large financial implications. <br /> <br />7he review of the Central Valley Project was the first to <br />be completed, and was published by OAI in January 1978. At <br />that time, the Carter Administration was engaged in an <br />extensive and controversial review of Federal water policy. <br />The revelation of substant~al underpayment for CVP water and <br />power, resulting in a projected shortfall of over $9 billion <br />over the life of the project, caught the attention of the White <br />House. The Carter water policy review culminated in a series <br />of directives to agency heads. One of these directives, dated <br />July 12, 1978, required the auditing of all major water project <br />accounts. -- <br /> <br />Within the newly established Office of the Inspector <br />General, the staff undertook to audit all projects representing <br />a total Federal investment of more than $100 million. The <br />audit reports resulting from this effort, which began in 1976, <br />are as follows: <br /> <br />o Central Valley Project: Office of Audit and Investigation, <br />"Review of the Central Valley Project," January 1978; <br /> <br />o Pick-Sloan Missouri Basin Program: Office of Audit and <br />Investigation, "Review of Repayment Status of Pick-Sloan <br />Missouri Basin Program," July 1978; <br /> <br />o Central Valley Project, Municipal and Industrial Water: <br />Inspector General's Audit Report "Review of Municipal and <br />Industrial \-later Activities, Central Valley project," <br />September 1979; <br /> <br />o Fryingpan-Arkansas Project: Inspector General's Audit <br />Report "Review of Selected Economic and Financial Aspects <br />of the Fryingpan-Arkansas Project~" August 1960; <br /> <br />o Central Arizona Project: Inspector General's Audit Report <br />"Review of Central Arizona project," September 1980; <br /> <br />o Colorado River Storage Project: Inspector General's Audit <br />Report "Review of Colorado River Storage Project and <br />Related Individual Participating projects," September 1980; <br /> <br />o Southern Nevada Water Project: Insp~ctor General's Audit <br />Report "Review of Balance Sheet and Repayment Status, <br />Southern Nevada Water Project," August 1961. <br /> <br />4 <br />