Bureau of Reclamation: Water Marketing Activities and Costs at	 
the Central Valley Project (04-MAY-01, GAO-01-553).		 
								 
This report discusses the water marketing activities undertaken  
by the Bureau of Reclamation's Central Valley Project and their  
associated costs. Water marketing costs have increased		 
significantly since 1989, but GAO found no evidence that the	 
costs were derived from activities other than normal operation	 
and maintenance activities that are recoverable from water	 
customers under applicable law. However, GAO's analysis of the	 
information provided to the water customers confirmed that the	 
customers were not able to determine whether (1) budgeted	 
activities were the ones that would actually be charged to them  
and (2) budgeted amounts for the coming year's activities	 
represented increases in previous estimates.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-553 					        
    ACCNO:   A00959						        
  TITLE:     Bureau of Reclamation: Water Marketing Activities and    
             Costs at the Central Valley Project                              
     DATE:   05/04/2001 
  SUBJECT:   Cost analysis					 
	     Marketing						 
	     Reimbursements to government			 
	     Water resources conservation			 
	     Water supply management				 
	     Bureau of Reclamation Central Valley		 
	     Project (CA)					 
								 

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GAO-01-553
     
Report to the Honorable John T. Doolittle, House of Representatives

United States General Accounting Office

GAO

May 2001 BUREAU OF RECLAMATION

Water Marketing Activities and Costs at the Central Valley Project

GAO- 01- 553

Page i GAO- 01- 553 Bureau of Reclamation Letter 1

Appendix I OBJECTIVES, SCOPE, AND METHODOLOGY 26

Appendix II O& M Water Rate Setting & Application of Payments 29

Appendix III Comments from the Department of the Interior 30

Appendix IV GAO Contact and Staff Acknowledgments 33

Tables

Table 1: Water Marketing General Categories, Sub- categories, and Examples
of Activities 9 Table 2: General Categories and Sub- Categories of Costs
Included

in the Water Marketing Component of Rates for CVP Irrigation Customers,
Fiscal Years 1996 and 2001 13 Table 3: General Categories and Sub-
Categories of Costs Included

in the Water Marketing Component of Rates for CVP M& I Customers, Fiscal
Years 1996 and 2001 14 Table 4: Projected Versus Actual Irrigation and M& I-
related Water

Marketing Costs, Fiscal Years 1992 through 1999 18

Figures

Figure 1: CVP Irrigation and M& I Water Marketing Rates, Fiscal Years 1989
Through 2001 (in nominal $ per acre- foot) 10 Figure 2: Relationship of
Irrigation Water Marketing and Storage

O& M Rate Components: Water Marketing Plus Storage, Fiscal Years 1989
Through 2001 (in nominal $ per acrefoot) 11 Figure 3: Relationship of
Irrigation Water Marketing and Storage

O& M Rate Components Adjusted for Inflation: Water Marketing Plus Storage,
Fiscal Years 1989 Through 2000 (in constant year 2000 $ per acre- foot) 12
Contents

Page 1 GAO- 01- 553 Bureau of Reclamation

May 4, 2001 The Honorable John T. Doolittle House of Representatives

Dear Mr. Doolittle: This report responds to your request that we review the
water marketing activities 1 undertaken by the Department of the Interior?s
Bureau of Reclamation?s (Bureau) Central Valley Project (CVP) and their
associated costs. In previous work we performed for the Subcommittee on
Water and Power, House Committee on Resources, pertaining to the Bureau?s
operation and maintenance (O& M) costs, 2 we identified concerns among some
CVP water customers that the amounts they were charged for water marketing
were excessive, and that the reasons for the increased costs were unclear to
them.

To follow- up on that work, you asked us to review the CVP water marketing
activities and costs in more detail. Specifically, you asked us to provide
information concerning (1) the activities and costs that comprise water
marketing, (2) the trend in associated costs, (3) the legal basis for
charging the costs of water marketing activities to water customers, and (4)
the type of information about water marketing activities provided to water
customers and ways to improve the information.

CVP water marketing costs, which are allocated to all water users through
rates, stem from two general categories of activities: system- wide
activities and contract administration activities. Both categories of
activities have contributed to the increase in water marketing costs for
irrigation and for municipal and industrial (M& I) customers. For irrigation
customers, the water marketing rate component increased from $. 20 per

1 Water marketing consists of two general categories of activities: contract
administration and system- wide activities. The contract administration
category consists of general administration and contract renewal activities,
while the system- wide category consists of a wide variety of activities.

2 Bureau of Reclamation: Information on Operations and Maintenance
Activities and Costs at Multipurpose Water Projects (GAO/ AIMD- 00- 127, May
31, 2000).

United States General Accounting Office Washington, DC 20548

Results In Brief

Page 2 GAO- 01- 553 Bureau of Reclamation

acre- foot in 1989 to $6.91 per acre- foot in 2001, 3 rising from about 11
percent of the total O& M rate 4 in 1989 to 62 percent in 2001. For M& I
customers, the water marketing rate component experienced a similar
increase- from $. 21 per acre- foot in 1989 to $7.00 per acre- foot in 2001.
Much of the cost increase relates to new technology, such as replacement of
the Centralized Water and Power System Control equipment and software that
controls the dams and other facilities; costs associated with contract
renewals; costs of environmental assessments; and increased emphasis on
initiatives such as water conservation and water quality monitoring. In
addition, the reclassification of certain costs- those related to the
general expense and water conservation- to the water marketing category
contributed significantly to the increase in water marketing costs.

Under the provisions of reclamation law, project- specific legislation, and
contracts with customers, the Secretary of the Interior has broad discretion
in defining which of the activities it undertakes constitute O& M that can
be charged to customers. Federal guidance also indicates that the full costs
incurred by the federal government in providing services should be recovered
from beneficiaries of those services. The Bureau is required to recover the
full costs of these activities, unless cost recovery for an individual
activity is specifically precluded by law. Our review of documents
describing the types of activities for which the Bureau was charging
customers under the water marketing component of rates did not identify any
activities that did not appear to be O& M related to CVP, nor any costs that
were precluded by law from recovery.

The Mid- Pacific Region provides many budget and ratesetting documents to
customers, responds to numerous questions from customers about the budget
and rates, and holds several informational meetings annually. The region
provides information from Budget Activity Plans, which are detailed
descriptions of planned water marketing and other O& M activities. However,
we found that the Budget Activity Plan information does not enable customers
to determine whether (1) estimated costs represent increases over prior year
amounts, and (2) customers will have to pay for the described activities. We
are making a recommendation to address this issue.

3 These increases are in nominal dollars. The increasing trend in inflation-
adjusted dollars, shown later in this report, is similar. 4 As discussed
later, for the purpose of analysis the O& M rate is comprised of the water
marketing and water storage rate components.

Page 3 GAO- 01- 553 Bureau of Reclamation

The Department of the Interior, in a letter from the Acting Chief of Staff
to the Assistant Secretary for Water and Science, generally agreed with our
report, but suggested that we clarify the wording of our recommendation with
respect to the timing of information to be provided to customers. We agreed
with the Department?s suggestion and revised our recommendation accordingly.
The Department also stated that the Bureau has begun capturing this
information in its database and therefore considers the recommendation to be
implemented. However, implementation will not be complete until the Bureau
actually provides the customers with the recommended information.

The Department of the Interior?s Bureau of Reclamation constructs and
operates water resource projects to provide water to arid lands in 17
western states. Construction, operation, and maintenance of these projects
are financed primarily with federal funds. The Bureau provides water for
irrigation purposes to state- established water and irrigation districts
that obtain the water under contracts and distribute it to farmers. The
Bureau also provides water for M& I, fish and wildlife habitat, recreation,
and power generation purposes. Through water service or repayment contracts,
the Bureau, over time, recoups a portion of the federal government?s costs
of providing the water. These contracts provide for both the repayment of
construction costs and O& M costs allocated to water supply.

The Bureau?s costs of constructing, operating, and maintaining its projects
are classified as either reimbursable or nonreimbursable. Reimbursable costs
are recovered from customers; nonreimbursable costs are borne by the federal
government. Generally, costs associated with supplying water for
agriculture, M& I, and hydroelectric generation purposes are reimbursable.
Costs related to flood control, recreation, and fish and wildlife
enhancement generally are nonreimbursable. While the Bureau recovers costs
from water customers through rates, cost recovery for power generation is
done by the Department of Energy?s Power Marketing Administrations (PMAs). 5

5 The PMAs are Bonneville Power Administration, Southeastern Power
Administration, Southwestern Power Administration, and Western Area Power
Administration. Background

Page 4 GAO- 01- 553 Bureau of Reclamation

Water marketing costs are charged to customers as part of the Bureau?s total
O& M costs. The Bureau defined the O& M activities associated with its
projects in a 1998 report to Congress by describing its complex mission and
by providing examples of the widely varied activities it conducts. The
report stated that the Bureau is ?responsible for the O& M of an extensive
infrastructure of constructed facilities, including diversion and storage
dams, pumping plants, powerplants, canals and laterals, pipelines, and
drains.? Further, it said that the Bureau is ?also responsible for
management of the federally owned lands on which these facilities are
located and for the natural and cultural resources of those lands.? The
water marketing component of the Bureau?s O& M reflects this diversity.
Water marketing costs are the result of many different distinct activities.

The CVP, located in California?s Central Valley Basin, is the one of the
Bureau?s largest multiple purpose water projects. The CVP is technologically
complex, consisting of numerous dams, reservoirs, canals, and pumping and
power- generating facilities. Historically the CVP has provided about 6
million acre- feet 6 of irrigation water each year to approximately 3. 8
million acres of cropland. Water used for irrigation purposes represents
about 85 percent of the total water available through CVP; the remainder is
used for M& I, fish and wildlife, and recreation. CVP water is also used to
generate power.

The Bureau enters into contracts to provide water to irrigation and M& I
customers. These contracts establish a rate for each acre- foot of water
with the intent to recover the CVP construction costs allocated to water
supply as well as the annual O& M costs. The Bureau annually sets rates for
both M& I and irrigation water customers. The rate depends upon the extent
and type of services provided to the customer by the Bureau, and consists of
a number of rate components (or cost pools) which correspond to the water
services provided. The rate components generally are

 water storage: the cost of facilities (primarily dams and reservoirs)
associated with the collection and storage of water; and

 water marketing: the costs incurred for monitoring, administering, and
negotiating water service contracts; record- keeping and accounting;
developing annual water rates; conducting environmental studies; and
performing other related activities.

6 An acre- foot of water is the volume necessary to cover 1 acre to a depth
of 1 foot. It is approximately 326,000 gallons of water.

Page 5 GAO- 01- 553 Bureau of Reclamation

Other costs involved in delivering water to customers include conveyance
(associated with facilities such as canals used for transporting water),
conveyance pumping (associated with facilities such as pumping plants used
to pump water through the project to more than one customer), and direct
pumping (associated with plants that pump water exclusively for specific
customers). ?Project Use Energy? costs are primarily associated with
conveyance pumping and direct pumping. Direct pumping costs are paid by
customers through the direct pumping rate component charged by the Bureau.
Since fiscal year 1998, conveyance and conveyance pumping costs are
typically not charged to customers through O& M rates, but instead are
direct billed to those customers using these services. As a result, these
costs are not included in our analyses of water marketing costs and their
impact on O& M costs.

The Bureau sets rates based on projected water deliveries and estimated
costs. 7 Typically, the Bureau uses its budget request data in determining
its estimated costs. After allocating the total estimated costs to
irrigation, M& I, and the other uses, the O& M rate for each component is
then calculated by dividing the component?s estimated total annual cost by
the applicable estimated water deliveries. After the actual water deliveries
and the Bureau?s actual costs have been determined, the customers? payments
are applied against the Bureau?s costs as specified by the CVP ratesetting
policies. The Bureau?s budget, ratesetting process, and application of
payments are graphically depicted in appendix II.

In recent years, some Bureau irrigation and M& I water customers have raised
concerns about O& M rates charged for CVP water. The rates have been
increasing faster than inflation, and the customers have expressed concern
about the impact of these costs on their businesses. The rate component
causing much of their concern relates to activities categorized by the
Bureau as ?water marketing.? The water marketing component of rates has
increased significantly over the past decade and CVP customers have voiced
concern, saying that they do not understand the underlying reasons for the
increases.

7 According to Bureau officials, the ratesetting policies for irrigation and
M& I functions are basically the same, and the water marketing activities
that apply to irrigation also apply to M& I.

Page 6 GAO- 01- 553 Bureau of Reclamation

For each of the four objectives of this report, we were asked to address
specific issues.

Regarding the activities and costs that comprise water marketing, we were
asked to (1) determine the general types of activities that were
historically categorized as water marketing, compared to the types of
activities categorized as water marketing today; and (2) provide detailed
information on water marketing activities and costs for fiscal years 1998
and 1999 and obtain the projections for future years, if available.

Regarding the trend in water marketing costs, we were asked to determine
annual increases or decreases in the water marketing component of rates
charged under water service contracts for fiscal years 1990 through 2000,
and identify reasons for any significant trends.

Regarding the legal basis for these costs, we were asked to determine the
Bureau?s legal basis for charging the costs of water marketing activities to
water customers.

Regarding the information provided to water customers, we were asked to
determine generally what information is provided to customers about water
marketing activities and costs, including information pertaining to fiscal
year 2000 and any projections for future years. We were also asked to
identify options that would enable the Bureau to provide customers with
better information.

To determine the activities and costs that comprise water marketing and
determine the trend in water marketing costs (objectives 1 and 2), we
reviewed and analyzed various Bureau documents. We analyzed historical water
ratesetting books showing budgeted amounts for fiscal years 19902001, actual
water marketing amounts for fiscal years 1992- 1999, ratesetting policy
manuals, and Mid- Pacific Region files pertaining to water marketing
activities at CVP. We also interviewed Mid- Pacific Region officials.

To determine the legal basis for charging the costs of water marketing
activities to water customers (objective 3), we analyzed Reclamation law,
project- specific legislation, and authorizing legislation applicable to
selected activities. We also reviewed Office of Management and Budget
Objectives, Scope,

And Methodology

Page 7 GAO- 01- 553 Bureau of Reclamation

(OMB) Circular A- 25 and federal accounting standards for federal guidance
as to what constitutes the full cost of an agency?s provision of goods and
services.

To determine the information provided to water customers, and identify
options for improving it (objective 4), we analyzed examples of documents
provided to customers and reports prepared by customer groups. We also
interviewed Bureau officials and representatives of CVP water customers.

We conducted our review from June 2000 to March 2001 in accordance with
generally accepted government auditing standards. We performed audit work at
the Bureau?s Mid- Pacific region, which manages and operates CVP. We also
interviewed officials from the CVP Water Association, which represents
customers of CVP. We did not verify the accuracy of all the data we obtained
and used in our analyses. Most of the data presented in this report relate
to budget projections; it was beyond the scope of the assignment to verify
linkage of budget data to the audited financial statements. We have
considered written comments from the Department of the Interior and revised
our report, as appropriate. The department?s comments are reproduced as
appendix III. The department also provided technical comments, which we
incorporated as appropriate but did not reproduce. Appendix I describes our
objectives, scope, and methodology in detail.

Our analysis concluded that CVP water marketing costs stem from two general
categories of activities: system- wide activities and contract
administration activities. Water marketing traditionally consisted of
contract administration activities but the category has grown to include a
variety of others, as represented by the system- wide category.

System- wide activities are categorized as ?water marketing? in order to be

?spread? to all customers for repayment. Some system- wide costs arise as
new mandates are passed that the Bureau must implement, such as costs
stemming from the CVP Improvement Act (CVPIA), which was passed in 1992.
Other system- wide costs, such as those classified as general expense, have
been reclassified as water marketing to assure that each CVP customer pays a
proportionate share of the cost involved. In addition, some water
conservation costs, which the Bureau had previously treated Water Marketing

Includes Two General Categories Of Activities

Page 8 GAO- 01- 553 Bureau of Reclamation

as nonreimbursable, have been reclassified as water marketing and charged to
water customers. 8 As shown later, when comparing the amount paid for water
marketing in fiscal year 1996 to the amount paid in fiscal year 2001, the
general expense reclassification accounted for about 12 percent of the total
increase for irrigation customers and about 15 percent of the increase for
M& I customers. Similarly, the reclassification of water conservation costs
accounted for about 11 percent of the total increase in the water marketing
rate component for irrigation customers and about 12 percent of the increase
for M& I customers. 9

Contract administration activities, according to Bureau officials, can be
considered to be ?traditional? water marketing activities. These include the
recurring activities involved in managing the terms of the Bureau?s
contracts with its customers, such as costs incurred for monitoring,
administering, and negotiating water service contracts, maintaining water
delivery and payment records, accounting for the annual financial results of
CVP water operations, and developing annual water rates. Since 1995, the
Bureau has also been incurring significant contract renewal costs as the
long- term contracts held with customers expire.

The Bureau allocates the costs of system- wide and contract administration
water marketing activities into several sub- categories. The sub- categories
relate to:

 programs, such as water quality monitoring, water conservation, and
hazardous materials management;

 legislation, such as the National Environmental Policy Act (NEPA),
Endangered Species Act (ESA), and CVPIA;

 CVP divisions or offices, such as water and power operations, water and
land resources management, and general contract administration and contract
renewal; and

 project- wide activities, such as those included in the miscellaneous
project, CVP- wide, and general expense sub- categories.

8 Under the provisions of the CVPIA, the Bureau treated the costs of water
conservation projects implemented by September 30, 1999, as nonreimbursable.
9 These were the two largest reclassifications to water marketing that we
identified. General expenses had previously been recovered through rate
components other than water marketing. Water conservation costs had
previously been classified as nonreimbursable. We did not identify all
reclassifications to water marketing from other rate components.

Page 9 GAO- 01- 553 Bureau of Reclamation

Table 1 shows examples of specific activities associated with each category
and sub- category.

Table 1: Water Marketing General Categories, Sub- categories, and Examples
of Activities

Category Sub- category Activity

System- wide Water & power operations Operating dam control center Water &
land resources management Providing technical assistance to

customers on drainage problems NEPA/ ESA/ other environmental impact
activities

Environmental studies related to management of existing contracts and
contract renewal Hazardous materials management Site audits at dams;

inspection of lands for transfer of ownership Miscellaneous project
activities Stations that monitor water

salinity; general rehabilitation and maintenance of facilities Other CVP-
wide programs Regional geographic information

system CVPIA Water conservation training and

research; re- establish damaged waterways Water quality monitoring Testing
for pollutants Water conservation Evaluating customers? water

conservation plans General expense Project- wide NEPA and ESA

activities Contract administration General administration Ratesetting and
accounting

Contract renewal Negotiating contract terms and environmental assessments

Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region.

The water marketing component of O& M rates has been increasing steadily
since 1989 for both irrigation and M& I customers, with significant
increases since 1995. The increases are due to rising costs in both the
system- wide and contract administration categories. As a result, water
marketing costs currently make up the largest share of CVP?s O& M rates.

Figure 1 shows that the water marketing component of rates has been
increasing for both irrigation and M& I customers. As the figure shows, the
rate for irrigation customers increased from $. 20 per acre- foot in 1989 to
$6.91 per acre- foot in 2001. M& I customers experienced a similar increase-
from $. 21 per acre- foot in 1989 to $7.00 per acre- foot in 2001. Water
Marketing O& M

Rate Component Has Increased Significantly

Page 10 GAO- 01- 553 Bureau of Reclamation

Figure 1: CVP Irrigation and M& I Water Marketing Rates, Fiscal Years 1989
Through 2001 (in nominal $ per acre- foot)

Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region.

Since fiscal year 1998, the total O& M rate has typically been comprised of
the water marketing and storage rate components. Figure 2 compares the water
marketing and storage rate components for irrigation. As figure 2 shows,
while both water marketing and storage rate components have increased for
irrigation customers since 1989, water marketing has overtaken storage to
become the largest rate component. Water marketing comprised about 11
percent of the combined total of the water marketing and storage rate
components in 1989 and about 62 percent in 2001. For M& I customers, water
marketing comprised about 12 percent of the combined total of the water
marketing and storage rate components in 1989 and 61 percent in 2001.

$0.00 $1.00

$2.00 $3.00

$4.00 $5.00

$6.00 $7.00

$8.00 Fiscal year Rate

Irrigation $0.20 $0.36 $0.36 $0.66 $1.22 $1.06 $0.82 $2.60 $2.67 $3.34 $4.63
$6.17 $6.91 M& I $0.21 $0.33 $0.42 $0.94 $1.58 $1.31 $1.47 $2.98 $3.51 $4.94
$5.78 $6.80 $7.00

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Page 11 GAO- 01- 553 Bureau of Reclamation

Figure 2: Relationship of Irrigation Water Marketing and Storage O& M Rate
Components: Water Marketing Plus Storage, Fiscal Years 1989 Through 2001 (in
nominal $ per acre- foot)

Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region.

The trend in inflation- adjusted 10 dollars is similar to that in nominal
dollars. As shown in figure 3, water marketing and storage costs have
increased and water marketing has become the largest rate component.
Converting the nominal dollars into constant year 2000 dollars shows that
the irrigation water marketing rate ranged from $. 26 in 1989 to $6.17 in
2000, and the storage rate from $2.17 per acre- foot in 1989 to $4.27 per
acre- foot in 2000. The total inflation- adjusted irrigation O& M rate
(water

10 To convert the nominal dollars into constant year 2000 dollars we used
the Gross Domestic Product index dated February 28, 2001, from the Bureau of
Economic Analysis.

$0.00 $2.00

$4.00 $6.00

$8.00 $10.00

$12.00 Fiscal year Rate

Storage $1.69 $2.14 $2.33 $3.73 $3.43 $3.47 $2.47 $2.84 $4.26 $4.91 $4.61
$4.27 $4.23 Water marketing $0.20 $0.36 $0.36 $0.66 $1.22 $1.06 $0.82 $2.60
$2.67 $3.34 $4.63 $6.17 $6.91

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Page 12 GAO- 01- 553 Bureau of Reclamation

marketing plus storage) would have ranged from $2. 43 per acre- foot in 1989
to $10.44 in 2000.

Figure 3: Relationship of Irrigation Water Marketing and Storage O& M Rate
Components Adjusted for Inflation: Water Marketing Plus Storage, Fiscal
Years 1989 Through 2000 (in constant year 2000 $ per acre- foot)

Note: Amounts are adjusted for inflation with 2000 being the base year. The
inflation index is the Gross Domestic Product index taken from the Bureau of
Economic Analysis dated February 28, 2001.

Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region and the Bureau of Economic Analysis.

To demonstrate more specifically which categories and sub- categories of
water marketing contributed most to cost increases, we reviewed in detail

$0.00 $2.00

$4.00 $6.00

$8.00 $10.00

$12.00 Fiscal year Rate

Storage $2.17 $2.64 $2.78 $4.34 $3.90 $3.86 $2.69 $3.04 $4. 47 $5.09 $4.70
$4.27 Water marketing $0.26 $0.44 $0.43 $0.77 $1.39 $1.18 $0.89 $2.78 $2. 80
$3.46 $4.72 $6.17

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Page 13 GAO- 01- 553 Bureau of Reclamation

the costs for irrigation and M& I users for fiscal years 1996 and 2001. 11
Tables 2 and 3 show the costs of irrigation and M& I- related water
marketing activities for fiscal years 1996 and 2001 and the amount of change
over that period of time.

Table 2: General Categories and Sub- Categories of Costs Included in the
Water Marketing Component of Rates for CVP Irrigation Customers, Fiscal
Years 1996 and 2001

Dollars in thousands a Category Fiscal year 1996 Fiscal year 2001 Change
Annual compounded

percentage change b

System- wide: Water & power operations $1,425 $4,384 $2,960 25.2 NEPA/ ESA/
other environmental activities 105 2,359 2,255 86.4 Water & land resources
management 254 1,948 1,694 50.3 General expense (first included fiscal year
2000) c 1,647 1,647 Water conservation c 1,503 1,503 Other CVP- wide
programs 38 1, 400 1,362 105.6 Miscellaneous project activities 747 1,656
910 17.3 Water quality monitoring 13 746 733 123.9 Hazardous materials
management program 1,535 870 -665 -10.7 CVPIA 1, 153 69 -1,085 -43.1

Total system- wide $5,269 $16,582 $11,313 25.8

Contract administration: General contract administration $1,845 $3,381
$1,536 12.9 Contract renewal 2, 135 2,946 811 6.6

Total contract administration $3,981 $6,327 $2,346 9. 7 Total water
marketing $9,250 $22,909 $13,659 19.9

a Totals and differences may not add due to rounding. b Annual compounded
percentage change is the average annual percent change, compounded annually,
between the amounts for fiscal years 1996 and 2001. c General expense and
water conservation had no costs included in water marketing for 1996 and

therefore an annual rate of change was not calculated for these two items.
Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region.

11 We compared fiscal year 2001 to fiscal year 1996 because 1996 was the
earliest year for which we could readily obtain detailed information.

Page 14 GAO- 01- 553 Bureau of Reclamation

Table 3: General Categories and Sub- Categories of Costs Included in the
Water Marketing Component of Rates for CVP M& I Customers, Fiscal Years 1996
and 2001

Dollars in thousands a Category Fiscal year 1996 Fiscal year 2001 Change
Annual compounded

percentage change b

System- wide: Water & power operations $256 $623 $367 19.4 NEPA/ ESA/ other
environmental activities 19 318 299 75.9 Water & land resources management
46 264 218 42.1 General expense (first included fiscal year 2000) c 234 234
Water conservation c 181 181 Other CVP- wide programs 7 199 192 96.1
Miscellaneous project activities 134 236 102 11.9 Water quality monitoring 2
90 87 106.6 Hazardous materials management program 276 124 -153 -14.9 CVPIA
183 10 -174 -44.4

Total system- wide $924 $2,278 $1,354 19.8

Contract administration: General contract administration $282 $407 $124 7.6
Contract renewal 316 354 39 2.3

Total contract administration $598 $761 $163 4.9 Total water marketing
$1,522 $3,039 $1,517 14.8

a Totals and differences may not add due to rounding. b Annual compounded
percentage change is the average annual percent change, compounded annually,
between the amounts for fiscal years 1996 and 2001. c General expense and
water conservation had no costs included in water marketing for 1996 and
therefore an annual rate of change was not calculated for these two items.
Source: Derived from information provided by the Bureau of Reclamation?s
Mid- Pacific Region.

As shown in tables 2 and 3, both categories of costs- system- wide and
contract administration- have contributed to the increase in irrigation and
M& I water marketing costs since 1996. The costs related to system- wide
activities have been the primary driver of the water marketing cost
increases, rising from $5.3 million in 1996 to $16.6 million in 2001 for
irrigation, and from $. 9 million in 1996 to $2.3 million in 2001 for M& I.

A wide range of activities have contributed to the overall increase in water
marketing costs over time, and the mix of activities responsible for the
increase differs from year to year. However, certain activities resulted in
significant costs over the 1996- 2001 time period. These include the costs
within both the system- wide and contract administration categories, such

Page 15 GAO- 01- 553 Bureau of Reclamation

as the costs of new technology; costs associated with contract renewals;
costs of environmental assessments; and new or increased emphasis on
initiatives such as water conservation and water quality monitoring.

Costs classified as general expenses have also contributed to the water
marketing increase. As discussed previously, general expenses involve a
variety of project- wide costs that, until fiscal year 2000, had been
allocated to other rate components such as water storage. Beginning in
fiscal year 2000, general expenses have been included in the water marketing
rate calculation and recovered from all customers. The effect of this
reclassification of general expenses to water marketing is shown in tables 2
and 3. When comparing the amount paid for water marketing in fiscal year
1996 to the amount paid in fiscal year 2001, the general expense
reclassification accounted for $1. 65 million of the $13.66 million (about
12 percent) of the total increase in water marketing costs for irrigation
customers. Similarly, the general expense reclassification accounted for
$234,000 of the $1.52 million (about 15 percent) of the total increase in
water marketing costs for M& I customers.

In addition, in fiscal year 1999 the Bureau reclassified water conservation
costs to water marketing and began to recover them through rates charged to
water customers. These costs 12 had previously been classified as
nonreimbursable and therefore had not been recovered. The effect of this
reclassification of water conservation to water marketing is shown in tables
2 and 3. When comparing the amount paid for water marketing in fiscal year
1996 to the amount paid in fiscal year 2001, the water conservation
reclassification accounted for $1.50 million of the $13.66 million (about 11
percent) increase in water marketing costs for irrigation customers.
Similarly, the water conservation reclassification accounted for $181,000 of
the $1.52 million (about 12 percent) increase in water marketing costs for
M& I customers.

Combined, the reclassification of general expense and water conservation
accounted for $3.15 million of the $13.66 million (about 23 percent)
increase in water marketing costs for irrigation customers when comparing
fiscal year 1996 to fiscal year 2001. The reclassification of general
expense and water conservation accounted for $415,000 of the

12 As noted earlier, under the provisions of the CVPIA, the Bureau treated
the costs of water conservation projects implemented by September 30, 1999
as nonreimbursable.

Page 16 GAO- 01- 553 Bureau of Reclamation

$1.52 million (about 27 percent) increase in water marketing costs for M& I
customers.

The following list provides examples of activities responsible for water
marketing budget increases during fiscal years 1996 to 2001 as described in
the Bureau?s explanations to its customers.

Water & power operations (increase: irrigation $2.96 million; M& I $. 37
million):

Replacement of the Centralized Water and Power System Control over a 5- year
period with new equipment and software that controls the dams and other
facilities. Both the old and new systems were run in parallel during the
conversion period.

Increase in the Hydromet System (which provides precipitation, temperature,
and snow water content data) for new equipment and to fully fund the
Bureau?s contract with the State of California for snow surveys.

Developing a new CVP Operating Criteria and Plans for consultation under
Section 7 of the ESA requiring technical assistance.

Required conversion of the CVP radio systems to a new system due to a change
in operating frequencies.

NEPA/ ESA compliance (increase: irrigation $2.26 million; M& I $. 30
million):

Implementation of biological opinions in conjunction with contract renewals.

Implementation of endangered species conservation plans. Water & land
resources management (increase: irrigation $1.70 million; M& I $. 22
million):

Increased resources for activities including review of proposals for joint
use of lands, wetlands development, and ground- water recharge.

Extensive coordination with water users; other federal, state, and local
agencies; and special interest groups.

Page 17 GAO- 01- 553 Bureau of Reclamation

Increased demand for services such as irrigation and drainage technical
assistance, land classification, crop reports, and emergency response
planning.

Water conservation (increase: irrigation $1.50 million; M& I $. 18 million):
Establishment of a water conservation office whose staff provides technical
support and services for water conservation measures.

Other CVP- wide programs (increase: irrigation $1.36 million; M& I $. 19
million):

Replacement of narrow band radios and CO2 fire suppression systems.
Increased coordination costs of the CVP and State Water Project models and
data gathering.

Increased demand for Geographical Information Systems in support of water
management and development activities.

Page 18 GAO- 01- 553 Bureau of Reclamation

In some years the Bureau?s projected water marketing costs, which are the
basis for customers? rates, have varied significantly from actual costs.
Actual costs are affected by unanticipated O& M needs. Depending on the
customers? water needs, actual water deliveries can vary from projected
deliveries. The uncertainty of estimating O& M costs in advance of the
year?s actual events, will result, as shown in table 4, in projected costs
varying from actual costs.

Table 4: Projected Versus Actual Irrigation and M& I- related Water
Marketing Costs, Fiscal Years 1992 through 1999 Dollars in thousands

Fiscal year 1992 1993 1994 1995 1996 1997 1998 1999 Irrigation

Projected $2,000 $3,708 $3,445 $4,007 $9,250 $9,250 $10,042 $14,898 Actual
2,156 2,663 3,768 3,927 5,767 7,519 9,771 12,562 Difference -$ 156 $1,045 -$
323 $80 $3,483 $1,731 $271 $2,336 Percent of projected -7.8 28.2 -9.4 2. 0
37.7 18.7 2. 7 15.7

M& I

Projected $350 $611 $649 $775 $1,522 $1,522 $1,880 $2,310 Actual 346 431 656
729 997 925 1,609 2,047 Difference $4 $180 -$ 8 $46 $525 $598 $271 $262
Percent of projected 1. 2 29.4 -1.2 6. 0 34.5 39.3 14.4 11.4

(Totals and differences may not add due to rounding) Source: Derived from
information provided by the Bureau of Reclamation?s Mid- Pacific Region.

As shown in table 4, actual water marketing costs differed from projected
for each of fiscal years 1992 through 1999. For irrigation, the differences
ranged from about $80,000 in 1995 (2.0 percent from the projected amount) to
almost $3.5 million in 1996 (37.7 percent from the projected amount). The
difference between the Bureau?s projected and actual costs has ranged from
underestimating by 9.4 percent to over estimating by 37.7 percent. For M& I,
the difference has ranged from about $4,000 in 1992 (1.2 percent from the
projected amount) to $598,000 in 1997 (39. 3 percent from the projected
amount). The difference has ranged from underestimating by 1.2 percent to
overestimating by 39.3 percent. Budgeted Water

Marketing Costs Differ from Actual Costs

Page 19 GAO- 01- 553 Bureau of Reclamation

Actual costs are allocated to each customer?s account based on actual water
usage. The customers? payments (which are paid in advance of water
deliveries) are to be applied against the Bureau?s costs as specified by CVP
ratesetting policies. If actual costs allocated to a customer exceed the
customer?s payments, the deficit is recovered through adjustments to
subsequent years? rates. If payments exceed allocated costs, the overpayment
is applied to any balances the customer has in the following accounts:
unpaid prior year O& M costs; interest on unpaid prior year O& M costs; and
construction costs. The order in which a customer?s payments are to be
applied to these balances is different for irrigation and M& I customers and
is shown in appendix II.

Water marketing costs are charged to customers as part of the Bureau?s total
O& M costs. The Bureau?s ability to determine which O& M costs to charge to
customers is governed by reclamation law, project- specific legislation, and
specific provisions of contracts 13 between the Bureau and water users.
Within these constraints, the Bureau 14 has broad discretion to decide which
O& M costs to charge to customers. Federal courts have confirmed the
Secretary of the Interior?s broad discretion to define what can properly be
assessed as an O& M expense. During the course of our review, we did not
identify any activities that did not appear to be O& M related to CVP, or
any costs that were precluded by law from recovery.

OMB guidance and federal accounting standards also guide the Secretary. This
guidance indicates that the full costs incurred by the federal government in
providing services should be recovered from beneficiaries of those services,
unless such cost recovery is precluded by law.

For example, OMB Circular A- 25 provides guidance for federal agencies to
use in setting fees to recover the full costs of providing goods or
services. 15 OMB Circular A- 25 defines full costs as all direct and
indirect costs of

13 Bureau contracts require that water supply customers pay for O& M
expenses assigned to irrigation or M& I purposes. 14 The authority to make
the determination is delegated to the Bureau by the Secretary of the
Interior. 15 The purpose of OMB Circular A- 25 is to implement a law
commonly known as the User Fee Statute. However, its guidance may be used by
agencies in setting fees authorized by other laws to the extent that it does
not conflict with the requirements of those laws. Water Marketing

Costs Are Recoverable As Normal Operations And Maintenance Costs

Page 20 GAO- 01- 553 Bureau of Reclamation

providing the goods or service. This definition is consistent with that
contained in federal accounting standards. The federal accounting standards
define the full cost of an entity?s output as ?the sum of (1) the costs of
resources consumed by the segment that directly or indirectly contribute to
the output, and (2) the costs of identifiable supporting services provided
by other responsibility segments within the reporting entity, and by other
reporting entities.? 16 Applying the definitions of ?full

cost? used in OMB Circular A- 25 and federal accounting standards indicates
that the full cost of the water supplied by the Bureau includes all direct
and indirect costs incurred in providing these services and that these costs
should be recovered, except where precluded by law.

We reviewed the Bureau?s exercise of its discretion to classify water
marketing costs as O& M that is charged to customers for reimbursement. We
analyzed selected fiscal year 2001 Budget Activity Plans, and determined
that the activities described in the plans could reasonably be defined as O&
M related to CVP. We further analyzed several of these plans and determined
that the described activities were not specifically excluded from recovery
by law. Thus, our review of these documents did not identify any activities
that were not O& M activities related to CVP or any costs that were
precluded by law from recovery.

However, in the course of our work we did note that the Mid- Pacific Region
is not recovering certain costs associated with employee postretirement
health benefits and Civil Service Retirement System employee pension costs
related to reimbursable project purposes that we recommended, on May 31,
2000, that the Bureau recover. These costs were estimated by the Mid-
Pacific Region to total $709,000 for fiscal year 1999. As we previously
recommended, these costs should be recovered as part of the Bureau?s normal
O& M costs. Our recommendation is still under consideration by the Bureau.

16 Financial Accounting Standards Advisory Board Statement of Federal
Financial Accounting Standards No. 4, Managerial Cost Accounting Concepts
and Standards for the Federal Government, June 1995.

Page 21 GAO- 01- 553 Bureau of Reclamation

The Mid- Pacific Region has made substantial progress in involving customers
in the budget process. The region provides many documents to customers,
responds to numerous questions about the budget and rates, and holds several
budget update meetings annually. However, providing some additional
information at the beginning of the budget process would facilitate
customers? understanding of the Bureau?s planned activities and their
ability to review and provide input to the planned activities.

The House Committee on Appropriations, reporting on the Energy and Water
Development Appropriations Bill of 1998, 17 stated that ?The

Committee strongly encourages the Bureau of Reclamation to create new
opportunities for water and power customers to participate in the review and
development of O& M budget priorities for their respective Bureau of
Reclamation projects.? In response to this committee?s concerns, the
Bureau?s Commissioner issued a directive dated September 24, 1998, that
required Bureau regions to involve customers in the budget process. The
directive states, in part, that the Bureau is to provide customers with the
opportunity to assist in formulating O& M activities and cost estimates, and
setting priorities in which the customers share in the responsibility or pay
a portion of the O& M cost with Reclamation.? 18

The Mid- Pacific Region has involved customers in the budget process in a
variety of ways. In 1999 and 2000, the region held meetings that discussed
budget priorities and reviewed budget execution. The Bureau also provided
information to customers about its ratesetting process, during which budget
data are converted to water rates. Examples of budget and ratesetting
information provided to customers are provided below.

Budget priority information. The Bureau provides detailed descriptions of
activities planned for the upcoming budget year to customers. This
information is based upon Budget Activity Plans, which are submitted by
program managers at both regional and area office levels. Among the major
informational categories the Budget Activity Plans include are:

 the name of the activity;

 whether the activity is new or ongoing;

 which appropriation will fund the activity; 17 House Report 105- 190,
105th Congress, 1st Session. 18 At the time the budget is formulated, O& M
activities have not been sub- classified into water marketing, storage,
conveyance, and the other components of water rates. Customers Receive

Substantial Information, But The Information Could Be More Complete

Page 22 GAO- 01- 553 Bureau of Reclamation

 a description of the activity, and justification for undertaking it;

 laws authorizing the activity; and

 years of future estimated costs. At the outset of the budget process, the
Bureau asks the customers to prioritize the activities described in Budget
Activity Plans. In preparing the final budget, the Bureau considers customer
input and other factors such as Bureau- wide priorities and the amount of
funding available for the year.

We analyzed the fiscal year 2001 Budget Activity Plans the Bureau identified
as involving water marketing activities, and found that the preparer had
usually provided information that was indicated by the various categories in
the document. However, we found that although the plans call for budget
estimates for future years, no information was given regarding previously
budgeted costs. As a result, customers cannot determine whether the
estimated amounts represent increases in previous estimates. In addition, it
was not possible to determine whether the described activity was
reimbursable- that is, whether the irrigation or M& I customer would have to
pay for the costs of the activity.

Budget execution information. The Bureau provides information that compares
budgeted costs to actual costs during the year. This provides customers with
information regarding whether the Bureau is providing services within
budgeted amounts. For example, the information provided to customers at the
region?s March 2000 meeting included:

Water marketing budgeted costs compared to expenditures and obligations
through February 2000 (42 percent of the year complete). The information was
categorized by type of activity and by the CVP office responsible for the
program.

Budgeted costs compared to expenditures and obligations for nonwater
marketing rate components, such as storage.

Adjustments made to budgeted costs because of reclassification of costs from
storage to water marketing and analysis of reimbursable costs that result in
the final rates for irrigation and M& I.

Information on M& I and irrigation expenditures and obligations broken down
into labor and non- labor as of the end of February 2000.

Ratesetting information. The Bureau prepares a ratebook each year that
details the O& M rate applicable to each customer. Customers and CVP

Page 23 GAO- 01- 553 Bureau of Reclamation

Water Association staff review and comment upon the ratebook, which
specifically identifies the customer?s water marketing costs. The ratebook
also includes tables showing each customer?s capital and energy costs for
the year; historical and projected water deliveries; and prior year actual
cost data. 19 In addition, the Bureau:

Responds to frequent written and telephonic questions from customers about
rates.

Regularly attends CVP Water Association meetings, at which rates are a
primary subject of discussion. The CVP Water Association includes
representatives of the CVP?s largest customers, and is the customers? focal
point for interaction with the region on rates.

Prepares an analysis, which is summarized in the ratebook, that identifies
significant changes from the preceding year?s budget and determines if any
significant changes have occurred in the budget as of the time that the
annual water rates are computed.

Water marketing costs have increased significantly, but we found no evidence
that the costs were derived from activities other than normal O& M
activities that are recoverable under applicable law. However, our analysis
of the information provided to water customers confirmed that the customers
were not able to determine whether (1) budgeted activities were ones that
would actually be charged to them, and (2) budgeted amounts for the coming
year?s activities represented increases in previous estimates.

The Bureau of Reclamation?s Mid- Pacific Region?s Regional Director should
ensure that appropriate regional personnel:

Provide additional budget information to customers at the beginning of the
budget process that would enable them to determine whether the budgeted
activities are ones that will actually be charged to them; and

19 The actual cost data presented is for the 2 fiscal years prior to the
year for which rates are being set. Conclusions

Recommendation

Page 24 GAO- 01- 553 Bureau of Reclamation

Provide additional information during the subsequent ratesetting process to
enable customers to determine whether the amounts estimated for budget
activities represent changes in prior year estimates.

We provided the Department of the Interior an opportunity to comment on a
draft of this report. The Department, in a letter from the Acting Chief of
Staff to the Assistant Secretary for Water and Science, generally agreed
with our report, but suggested that we clarify the wording of our
recommendation with respect to the timing of information to be provided to
customers. The Department suggested that the recommendation for informing
customers whether the estimated costs of the upcoming year?s activities
represent changes in previous estimates be revised so that this information
is provided not at the beginning of the budget development process, but
rather during the subsequent ratesetting process. We considered this a
reasonable view. Accordingly, we are calling on the Bureau to (1) provide
customers information at the beginning of the budget process necessary to
determine whether the budgeted activities are ones that will actually be
charged to them, and (2) provide information in the subsequent ratesetting
process to enable customers to determine whether the amounts estimated for
budget activities represent changes in prior year estimates.

The Department also stated that the Bureau considers the recommendation to
be implemented. We agree that the Bureau has begun implementing the
recommendation by capturing the necessary information in its database.
However, implementation will not be complete until the Bureau actually
provides the customers with the recommended information. The Department?s
comment letter is reproduced in appendix III.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this letter until 10 days from
its date. At that time, we will send copies to appropriate House and Senate
Committees; interested Members of Congress; The Honorable Mitchell E.
Daniels, Jr., Director, Office of Management and Budget; and other
interested parties. This letter will also be available on GAO?s home page at
http:// www. gao. gov. We will also make copies available to others upon
request. Agency Comments

And Our Evaluation

Page 25 GAO- 01- 553 Bureau of Reclamation

Please call me at (202) 512- 9508 if you or your staff have any questions.
Major contributors to this report are listed in appendix IV.

Linda M. Calbom Director Financial Management and Assurance

Appendix I OBJECTIVES, SCOPE, AND METHODOLOGY

Page 26 GAO- 01- 553 Bureau of Reclamation

We were asked to address specific issues related to the Bureau?s water
marketing activities and costs at CVP, including (1) the activities and
costs that comprise water marketing, (2) the trend in associated costs, (3)
the legal basis for charging the costs of water marketing activities to
water customers, and (4) the type of information about water marketing
activities provided to water customers and ways to improve the information.

Specifically, for each of these issues we were asked to address: (1) Water
Marketing Activities and Costs

The general types of activities that the Bureau has categorized as water
marketing, both currently and historically.

The specific activities that comprised water marketing during fiscal years
1996 through 2000 and the charges associated with each activity.

The projected water marketing charges for fiscal year 2001. (2) Trends in
Water Marketing Costs

The annual changes in water marketing charges for fiscal years 1990 through
2000, and the reasons for any significant trends.

(3) Legal Basis for Charging Water Customers The Bureau?s legal basis for
including costs classified as water marketing in water rates.

(4) Information Provided to Customers The general information about costs
classified as water marketing that the Bureau provides to its customers.

The specific information provided regarding fiscal year 2000 water marketing
costs.

Options, if any, that would enable the Bureau to provide customers with more
detailed information.

We addressed these issues in the following ways. Appendix I

OBJECTIVES, SCOPE, AND METHODOLOGY

Appendix I OBJECTIVES, SCOPE, AND METHODOLOGY

Page 27 GAO- 01- 553 Bureau of Reclamation

(1) Water Marketing Activities and Costs Interviewed Bureau officials
regarding changes in water marketing over time.

Reviewed applicable definitions in law, manuals, and written policies.
Reviewed Bureau budget documents that listed and described the specific work
activities constituting the water marketing category of costs.

(2) Trends in Water Marketing Costs Obtained Bureau documents showing annual
water marketing charges for fiscal years 1996 through 2000 and information
on actual costs, to the extent available.

Analyzed the data and prepared graphs to identify trends over time. Compared
charges to actual costs (if available) and interviewed Bureau officials to
determine reasons for substantial differences between charges and actual
costs.

Obtained projected water marketing charges for 2001, and compared them to
prior years.

(3) Legal Basis for Charging Water Customers Reviewed applicable law and
documents and interviewed Bureau officials to determine whether water
marketing is defined in law.

Reviewed prior GAO work regarding the legal requirement that O& M costs be
recovered in water rates.

Reviewed selected water marketing activities to determine whether any law
exists that excludes the specific activity from being recovered in rates.

Interviewed Bureau officials regarding water marketing cost recovery. (4)
Information Provided to Customers

Appendix I OBJECTIVES, SCOPE, AND METHODOLOGY

Page 28 GAO- 01- 553 Bureau of Reclamation

Reviewed documentation of meetings between the Bureau and customers in
fiscal year 2000 regarding water marketing charges.

Analyzed documents provided to customers to determine whether they described
the types of work being charged to customers as a cost of water marketing.

Interviewed Bureau officials and representatives of the CVP Water
Association, which represents CVP customers, to determine whether more
detailed water marketing cost information was warranted. We also reviewed
information provided by the CVP Water Association.

We conducted our review at the Bureau?s Mid- Pacific Region, which operates
and manages CVP, from June 2000 through April 2001 in accordance with
generally accepted government auditing standards. To the extent practical,
we corroborated data provided by the Bureau through interviews and by
comparing amounts to amounts shown on audited financial statements. However,
in most cases we did not verify the accuracy of the data provided. We have
considered written comments from the Department of the Interior and revised
our report, as appropriate.

Appendix II O& M Water Rate Setting & Application of Payments

Page 29 GAO- 01- 553 Bureau of Reclamation

Appendix II O& M Water Rate Setting & Application of Payments

O&M Water Rate Setting & Application of Payments

President's budget sent to Congress (Feb)

Budgeted O&M costs and projected

water usage allocated by component

(May) Initial rates prepared

(Oct) Customers review & provide input

(60 days) Rates finalized Customers notified Program managers submit
activity plans

Region prepares and submits budget request and activity plans updated

Bureau prepares and submits budget request

Department of the Interior and OMB finalize budget request President's
budget sent to Congress

(Feb) Budget preparation

Ratesetting Customers use water

Bureau incurs costs Actual costs

allocated based on each customer's actual water usage by component Actual
activity

Customers' O&M payments are applied against costs in the following order:
Municipal & Industrial customers: - Current year O&M - Interest on any O&M
deficits - Construction costs (capital costs) - Unpaid prior year O&M costs
(deficits) - Refund / credit, as applicable Irrigation customers:

- Current year O&M - Interest on any O&M deficits - Unpaid prior year O&M
costs (deficits) - Construction costs (capital costs) - Refund / credit, as
applicable Customers' advance

payments received (paid monthly, quarterly, or semi-annually)

Sou rce: Derived from infor

ma tion

provided by the Bureau of

Reclama tion?s Mid- Pacific Region.

Appendix III Comments from the Department of the Interior

Page 30 GAO- 01- 553 Bureau of Reclamation

Appendix III Comments from the Department of the Interior

Appendix III Comments from the Department of the Interior

Page 31 GAO- 01- 553 Bureau of Reclamation

Appendix III Comments from the Department of the Interior

Page 32 GAO- 01- 553 Bureau of Reclamation

Appendix IV GAO Contact and Staff Acknowledgments

Page 33 GAO- 01- 553 Bureau of Reclamation

Rob Martin, (202) 512- 4063 In addition to the individual named above, Dave
Bogdon, Brian Eddington, Edda Emmanuelli- Perez, Larry Feltz, Jeff Jacobson,
Mary Merrill, and Maria Zacharias made key contributions to this report.
Appendix IV

GAO Contact and Staff Acknowledgments GAO Contact Acknowledgments

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