[Audit Report on the Identification of Unneeded Acquired Lands, Bureau of Reclamation]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 99-i-133

Title: Audit Report on the Identification of Unneeded Acquired
       Lands, Bureau of Reclamation

Date:  December 21, 1998




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U.S. Department of the Interior
Office of Inspector General


AUDIT REPORT

IDENTIFICATION OF UNNEEDED ACQUIRED
LANDS, BUREAU OF RECLAMATION


REPORT NO. 99-I-133

DECEMBER 1998




MEMORANDUM


             TO:  The Secretary

           FROM:  Eljay B. Bowron
                  Inspector General

SUBJECT SUMMARY:  Final Audit Report -
                  "Identification of Unneeded Acquired Lands,
                  Bureau of Reclamation" (No. 99-i-133)


Attached  for  your information is a copy of the  subject  final
audit   report.    Theobjective  of  the  audit  was to determine
whether   the  Bureau  of  Reclamation   wasconducting  the
required  reviews of  real property it manages to identify,
report, and dispose  of  acquired lands no longer needed
for  project  purposes  in  accordance  with Federal   and
Bureau    regulations   and Reclamation law.

The  Bureau  had not conducted real property reviews  since
1993 to  identify  unneeded acquired lands  associated  with
its  water projects.    Federal   Property   Management
Regulations require that  each  executive agency  conduct
annual   reviews  of  real property to determine whether any
portion of the  property  is not being used,  is  being
underused, or is  not being  put to optimum use.   However,
the Bureau did not  conduct its acquired lands reviews
primarily because it  had  assigned a  low  priority  to
such reviews.    In   addition,  the Bureau  had "sunsetted"
its internal    instructions implementing the Federal Property
Management Regulations. Thus, according to some Bureau regional
and area office employees, they did not believe that the
"sunsetted" instructions should  be  followed.   As  a result
of not identifying unneeded acquired lands  through  the
required  process,  the Bureau did  not initiate  actions to
report and  dispose of such lands and to  generate potential
revenues  from  the sale of these lands.  Our review of 14
projects or project units   identified  about  67,220 acres
of potentially  unneeded acquired lands, which had a Bureau
-estimated current  value  of about  $17.5 million.  According
to  Bureau officials, the  estimated current value  is based
on the purchase price of the land and does  not represent the
land's  fair  market value.

In its response, the Bureau agreed with our three recommendations
to   address  these issues. Based on the response, we considered
the three recommendations resolved  but  not implemented.

If   you  have any questions concerning this matter, please
contact me at (202) 208-5745 or Mr. Robert J. Williams,
Assistant Inspector General for  Audits, at (202) 208-4252.

Attachment




December 21, 1998                    W-IN-BOR-001-98-D


AUDIT REPORT


Memorandum

     To:  Assistant Secretary for Water and Science

   From:  Robert J. Williams
          Assistant Inspector General for Audits

Subject:  Audit Report on the Identification of
          Unneeded Acquired Lands, Bureau of
          Reclamation (No. 99-i-133)

INTRODUCTION

This  report  presents the results of our audit of the
Bureau of Reclamation's review process for identifying
unneeded acquired  lands.   The objective of the audit
was to determine whether the Bureau was conducting the
required  reviews of real property[1]  it  manages  to
identify, report,  and  dispose  of  acquired lands no
longer needed for project purposes in  accordance with
Federal and Bureau regulations and Reclamation law.

BACKGROUND

The  Reclamation  Act of 1902 and subsequent  statutes
authorized  the  Bureau  to  construct,  operate,  and
maintain   an   infrastructure    of   water   storage
facilities[2]  to reclaim arid and semiarid  lands  in
the Western United States.  Bureau projects consist of
about 348 storage dams and reservoirs and 54,500 miles
of  canals  and  other   conveyance  and  distribution
facilities.

In the late 1980s, the Bureau  concluded  that  it had
mostly  achieved  its mission as a developer of large,
Federally  funded water  projects  and  redefined  its
mission to that of a water resources management agency
focused on conservation  and  the  environment.   As a
result,  Bureau  programs  are gradually changing from
emphasizing   construction   to    emphasizing   water
conservation,    wastewater    reuse,   river    basin
management,  and environmental restoration.   Some  of
the projects the  Bureau anticipated constructing will
not be built, and in  some  cases,  the lands acquired
will not be needed for project purposes.

On  November  1,  1993,  the Commissioner,  Bureau  of
Reclamation, stated in the  memorandum  "Blueprint for
Reform"   that  "all  existing  guidance  [Reclamation
Instructions] will be sunset[ted] at the end of fiscal
year 1995 unless affirmatively retained or revised and
reissued prior  to  then."   However, the requirements
set   forth   in   the  Federal  Property   Management
Regulations (41 CFR  101-47.8)  remained in effect and
provided  criteria  for identifying  unneeded  Federal
real  property  and  required  executive  agencies  to
conduct annual reviews  of  their  real  property  and
prepare  detailed written records of the reviews.  The
"sunsetted"   Reclamation  Instructions  (Series  210,
Parts 215.1.9A  and 215.10.2) implementing the Federal
Property Management  Regulations  required  that  land
reviews  be  conducted at a minimum of "every 5 years,
with more frequent  reviews  for  areas  with  special
problems  or   relatively weak managing agencies"  and
defined  unneeded   property   as   property  with  no
foreseeable  future  need and property  not  used  for
program purposes within  3  years  from the end of the
current  fiscal  year.  Part 215.10.2  further  stated
that "[t]he less certain this probable future need is,
the greater consideration must be given to disposal."

As  of  January  1998,  the  Bureau's  automated  land
management record  system  (the  Resource  Information
System)  listed 178 projects with associated  acquired
land of 2.2  million  acres,  ranging from 0.3 acre to
267,008  acres.   This land, which  was  acquired  for
project  purposes  through  purchases,  condemnations,
gifts, or exchanges,  is  managed  primarily  by other
agencies,  including  other Department of the Interior
agencies,    other    Federal    departments,    state
governments, and local  jurisdictions.   However,  the
Bureau  is responsible for identifying, reporting, and
disposing of unneeded acquired lands.

SCOPE OF AUDIT

We conducted  our audit from January through June 1998
at the Bureau offices  identified  in  Appendix 2.  To
accomplish   our  objective,  we  reviewed  applicable
Federal laws and  Federal  and  Bureau regulations and
policies,   including   draft   Reclamation   Manuals,
governing the ownership of real property as it relates
to acquired land and Bureau activities  pertaining  to
land  reviews conducted from 1993 through 1997.  Based
on the  percentage  of  acquired lands associated with
each Bureau project, information  obtained from a 1985
General  Accounting  Office report[3]  about  projects
with unneeded acquired  lands,  and  an examination of
project maps, we judgmentally selected projects within
regional and area offices to be reviewed.  As such, we
conducted a detailed review of selected  land  parcels
on  14  projects  or  project  units  (see Appendix 3)
representing about 30 percent, or about 660,000 acres,
of   the   Bureau's   2.2 million  acres  of  acquired
lands.[4]  Our review of each project or unit included
an  examination  of  authorizing  legislation;  realty
documents,  including project  plat  and  other  maps,
correspondence,   and   project  and  land  management
reports related to land acquisition,  management,  and
disposal; and documents related to land use, including
management  plans  and  lease  agreements  with  local
entities   and   private  parties.   In  addition,  we
interviewed  cognizant   Bureau   program  and  realty
personnel familiar with the projects  or project units
under review.

The audit was made, as applicable, in accordance  with
the  "Government  Auditing  Standards,"  issued by the
Comptroller    General    of    the   United   States.
Accordingly,  we included such tests  of  records  and
other  auditing   procedures   that   were  considered
necessary  under the circumstances.  As  part  of  the
audit,  we  reviewed   the   Departmental  Reports  on
Accountability for fiscal years  1996  and 1997, which
included information required by the Federal Managers'
Financial  Integrity  Act,  and  determined   that  no
material   weaknesses   were  reported  that  directly
related to the objective and scope of our audit.

We also reviewed the system  of internal controls over
the Bureau's process of reviewing acquired land to the
extent that we considered necessary.   We  found  that
the  Bureau  had not established the internal controls
and procedures needed to ensure that the required real
property reviews  were conducted and, accordingly, had
not identified unneeded  acquired  lands  through this
process.   These  weaknesses  are  addressed  in   the
"Results  of  Audit"  section  of  this  report.   Our
recommendations,  if  implemented,  should improve the
internal controls in these areas.

PRIOR AUDIT COVERAGE

Neither  the  Office  of  Inspector  General  nor  the
General  Accounting Office has issued any  reports  on
the Bureau's  identification  and disposal of unneeded
acquired lands within the last 5 years.

RESULTS OF AUDIT

The  Bureau  of  Reclamation  has not  conducted  real
property  reviews  since  1993  to  identify  unneeded
acquired  lands  associated with its  water  projects.
Federal Property Management  Regulations  require that
each executive agency conduct annual reviews  of  real
property  to  determine  whether  any  portion  of the
property is not being used, is being underused, or  is
not  being  put to optimum use.  However, we concluded
that the Bureau  did  not  conduct  its acquired lands
reviews  primarily  because  it  had  assigned  a  low
priority to such reviews.  In addition, the Bureau had
"sunsetted" its internal instructions implementing the
Federal   Property   Management  Regulations.    Thus,
according  to some Bureau  regional  and  area  office
employees, they  did  not believe that the "sunsetted"
instructions should be  followed.   As a result of not
identifying   unneeded  acquired  lands  through   the
required process,  the Bureau did not initiate actions
to report and dispose  of  such  lands and to generate
potential revenues from the sale of  these lands.  Our
review  of  14  projects  or project units  identified
about  67,220 acres of potentially  unneeded  acquired
lands, which  had  a Bureau-estimated current value of
about $17.5 million  (see  Appendix 3).   According to
Bureau  officials,  the estimated  current  value   is
based on the purchase  price  of the land and does not
represent the land's fair market value.

The Code of Federal Regulations  (41  CFR 101-47.201-1
and 201-2, "Federal Property Management  Regulations")
requires annual reviews of real property to "stimulate
the identification and reporting . . . of  excess real
property  .  .  . [t]o achieve the maximum utilization
[of real property]  .  .  .  in  terms  of economy and
efficiency."     In   1985,   the   General   Services
Administration stated  that  "departments and agencies
should  schedule  surveys  of  their   real   property
holdings  on  a 5-year cycle" and initiated procedures
for most land-managing  agencies  to perform intensive
reviews in accordance with the Code (41 CFR 101-47.8).
In  addition, prior Reclamation Instructions  and  the
draft  "Reclamation  Manual  on Administration of Land
Resources"[5]  state  that acquired  lands  should  be
reviewed, at a minimum, every 5 years.

We found that none of the  Bureau's  regions  and area
offices   visited   or  contacted  had  conducted  the
acquired  land  reviews   since  1993.   As  such,  we
performed   audit  fieldwork  to   determine   whether
selected acquired  lands  retained  by the Bureau were
needed for project purposes.  Based on  our  review of
the   selected   14  projects  or  project  units,  we
identified  67,220   acres   of  potentially  unneeded
acquired lands that had an estimated  current value of
approximately $17.5 million, as detailed in Appendix 3
and discussed as follows:

-   We identified 36,525 acres that had been  purchased
 to obtain  water  rights  at  the  Gila (4,530 acres),
 Colorado River Basin Salinity Control  (2,995  acres),
 and  Humboldt  (29,000 acres) Projects.  Although  the
 acquired land will  be  less  valuable  without  water
 rights, Bureau officials for the three projects agreed
 that the land was not needed for project purposes.  At
 the  Gila  Project, 1,770 acres were part of a bombing
 range at a U.S.  Air Force range, and 2,760 acres were
 idle.  The 2,995 acres  at  the  Colorado  River Basin
 Salinity Control Project were idle, and the  Yuma Area
 Office  had  identified three trespasses on the  land,
 one of which has  been ongoing since 1996.  The 29,000
 acres  at the Humboldt  Project  were  used  only  for
 seasonal  pasturing  of  livestock,  which  is  not  a
 project purpose.

-   We identified 6,321 acres of land located above the
 reservoir  capacity elevation at the Willow Creek (650
 acres), Canyon  Ferry  (475  acres),  Stony Gorge (440
 acres),  and East Park (250 acres) Reservoirs  and  at
 Elwell (3,500  acres)  and  Banks  (860  acres) Lakes.
 Under the Code of Federal Regulations (43  CFR 8), the
 Department of the Interior and the U.S. Army  Corps of
 Engineers are required to acquire and retain land only
 up  to  the  design  capacity  of  the  reservoir.  In
 addition, at the Canyon Ferry Reservoir, we identified
 acquired lands (146 acres) that were used  as  a  golf
 course  and  athletic  field,  which  were not project
 purposes.

-   We  identified 2,327 acres of land at  the  Narrows
 Unit of  the  Pick-Sloan  Missouri  Basin Program.  Of
 this  land,  1,065  acres  were  located  outside  the
 boundary  of  the  Unit, which was downsized in  1984.
 Although  the  remaining   1,262   acres  were  within
 authorized project boundaries, Bureau  officials  told
 us  that  neither the original nor a downsized version
 of the Unit would be built.  Accordingly, the Bureau's
 retention of  the  2,327 acres  does  not appear to be
 warranted.  The Unit was authorized in  1970  but  was
 never  developed  because  of  environmental  concerns
 about  the  impact  of  the  Unit  on  threatened  and
 endangered species in the Platte River system.

-   We identified 19,589 acres of land at the Oahe Unit
 of the  Pick-Sloan Missouri  Basin Program.  According
 to Bureau officials, the Unit will not be built in the
 foreseeable   future.    The   Congress   discontinued
 construction  appropriations beginning in fiscal  year
 1978 and, in 1982, enacted legislation authorizing the
 Secretary of the  Interior  to  find  other  uses  for
 existing  facilities  constructed  under  the  initial
 stage of the Unit, cancel existing repayment contracts
 with  the  districts, and treat costs already incurred
 as deferred  Program  costs.   The construction of the
 Unit  has  been opposed by local interests,  including
 project  beneficiaries   who   believe   that  project
 benefits  do not justify the cost of development.   Of
 the 19,814  acres  of  land  acquired by the Bureau to
 develop the Unit, 225 acres were  used  for  fish  and
 wildlife   mitigation   and  enhancement,  which  were
 authorized project purposes  of the Unit.  At the time
 of  our  review, we noted that 18,525  of  the  19,589
 acres of unneeded  lands  were  leased exclusively for
 livestock grazing and for agricultural purposes, which
 are not project purposes.

-  We identified 1,810 acres of acquired  land  located
 at  the  Sun River Project (1,360 acres) and at Shasta
 (300 acres)  and  New  Melones  (150 acres) Lakes that
 were potentially unneeded because the land was located
 outside  project  boundaries or existing  recreational
 areas and was not used  for  project  purposes  at the
 time   of  our  review.   During  our  review,  Bureau
 officials agreed with this assessment of need.

-  While reviewing project files at the Mid-Pacific and
 Great Plains  Regional  Offices  and the South-Central
 California  and  Montana  Area Offices,  we  found  13
 parcels,  totaling  648 acres,  at  four  projects  or
 project units that had  been previously identified for
 disposal by the Bureau prior  to  1993  or  that had a
 long-term  trespass  history but had not been disposed
 of.  Realty personnel  said  that  they were not aware
 that these parcels had been previously  identified  as
 unneeded,  and  Bureau  project  files did not include
 documentation to indicate that the parcels' status had
 changed.   For instance, of the 10  parcels,  totaling
 48 acres,  located   along   the   Friant-Kern  Canal,
 9 parcels,  totaling  45  acres,  were  identified  as
 unneeded  as  early  as 1984, and a 3-acre parcel  has
 been the subject of a trespass by a local farmer since
 1992, at which time an expired lease agreement was not
 renewed.  Officials at  the  South-Central  California
 Area  Office  told  us that they did not have time  to
 resolve the trespass  and  that  the  land  was  being
 retained  because  of  a  1991  U.S. Fish and Wildlife
 Service biological opinion that required  a  survey of
 the  lands  served  by  the Canal within 18 months  to
 identify   remaining   habitat   for   threatened   or
 endangered  species.  However,  at  the  time  of  our
 review, the survey had not been initiated.

We believe that  the  Bureau  had  not  performed  the
required reviews because it assigned a low priority to
conducting  such  reviews.   Bureau  officials told us
that   the  Bureau  had  "few  land  disposal   tools"
available to assist it in identifying and disposing of
its unneeded  acquired  lands.   Bureau officials said
that they believed the following factors justified why
the reviews were not conducted:  (1)  realty employees
who conducted the reviews had left the  Bureau  during
extensive  downsizing,  (2) land acquired for projects
unlikely to be built or completed  as  planned  should
not  be  disposed  of until the projects were formally
deauthorized by the  Congress,  (3) land not presently
needed for a project might be needed in the future for
purposes  such  as  recreation and fish  and  wildlife
enhancement,    and    (4) Reclamation    Instructions
requiring real property reviews and the identification
of unneeded acquired land  were "sunsetted" at the end
of  fiscal  year  1995.   Officials  in  the  Bureau's
Program Analysis Office stated that they believed that
these Instructions would be followed by area and field
offices   until   the  Reclamation   Manual   on   the
administration of land  resources  was  completed  and
issued.   However,  field  personnel told us that they
were  not  aware  that  the  "sunsetted"  Instructions
remained  in effect.  While we  recognize  that  these
factors may  have  affected the Bureau's allocation of
staff  and funding resources,  we  were  not  able  to
confirm  that  these factors prevented the Bureau from
performing  any  acquired   land  reviews  and  taking
appropriate actions, such as notifying the Congress of
its intention to dispose of acquired lands on projects
unlikely to be built.

In the September 25, 1998, response  (Appendix  4)  to
the draft of this report from the Commissioner, Bureau
of  Reclamation,  the  Bureau  reported  that  it  had
disposed  of  4,600  acres  of  acquired  land with an
estimated current market value of $9.3 million  during
fiscal  years 1993 through 1997.  Upon receipt of  the
response,  we requested additional information related
to the disposals  cited.   However, the Bureau did not
specify the individual parcels  or  the  bases for the
estimated  current  fair market value.  Therefore,  we
were not able to verify  the  accuracy of the reported
disposals.  At the locations we  visited,  we  did not
identify any regularly scheduled real property reviews
and subsequent disposals of acquired lands.

Recommendations

We   recommend   that   the  Commissioner,  Bureau  of
Reclamation:

1. Develop and issue clear  policies  and procedures to
 guide Bureau officials in conducting land  reviews and
 identifying unneeded real property.

2. Establish a Bureauwide plan of action to ensure that
 regular  reviews of real property are conducted  based
 on the guidance developed under Recommendation 1.

3. In implementing  Recommendations 1 and 2, notify the
 Congress  of  the Bureau's  intention  to  dispose  of
 acquired lands  in  accordance with 41 CFR 101-47 that
 were initially purchased  for  authorized projects but
 presently are not needed for undeveloped or incomplete
 projects.

Bureau of Reclamation Response and Office of Inspector
General Reply

In the September 25, 1998, response  (Appendix 4), the
Bureau   concurred  with  the  three  recommendations.
Based on the response, we consider the recommendations
resolved  but   not   implemented.   Accordingly,  the
unimplemented recommendations  will be referred to the
Assistant Secretary for Policy,  Management and Budget
for  tracking  of  implementation,  and   no   further
response   to  the  Office  of  Inspector  General  is
required (see Appendix 5).

Additional Comments on Audit Report

In  its response,  the  Bureau  also  made  additional
comments  on  the  draft report regarding the Bureau's
land  disposal  program.    These  comments  primarily
addressed   two   Bureau   concerns:    (1)    "narrow
interpretation" and application of the Code of Federal
Regulations   (43   CFR  8,  "Joint  Policies  of  the
Departments of the Interior  and  of the Army Relative
to Reservoir Project Lands") by the audit team and (2)
lack  of recognition of Bureau actions  in  reviewing,
disposing  of,  and  retaining  acquired  lands.   The
Bureau's  comments and our replies to the comments are
as follows:

The Bureau  stated  that the audit team used a "narrow
interpretation" of the  Code  (43 CFR 8) when the team
identified  the  67,220  acres of  acquired  lands  as
potentially   unneeded.   Specifically,   the   Bureau
stated, "The interpretation  that  has been applied is
that  if  the lands do not have structures  or  actual
waters associated  with the reservoirs, then the lands
are   excess   to  the  authorized   project   program
requirements."   The  Bureau  further  stated  that it
believes the policy is "broader than described in  the
report"  and  that  the  Code (43 CFR 8) "provides for
management  discretion in acquiring  additional  lands
for   fish   and   wildlife"   and   "future   outdoor
recreation."   The  Bureau concluded, "It is important
not  to  dispose  of  lands   that  may  have  habitat
potential for wildlife or that  may  be beneficial for
program mitigation purposes."

Although  we  agree  that  the regulation  allows  the
Bureau the discretion to acquire  additional lands for
future fish and wildlife and recreational purposes, we
disagree  that  we applied a narrow interpretation  of
the Code (43 CFR  8).  In that regard, we believe that
the Bureau should use  the  land  for the purposes for
which  it  was purchased or document  specific  future
needs.  Without  such  use  or  documented  need,  the
continued  retention of the land is questionable.  For
example, the  land  identified  around  Lake Elway was
purchased   in  the  mid-1950s  for  the  purpose   of
providing an  irrigation  water  supply that was never
fully developed.  The land identified in this instance
is currently used to graze livestock,  and  the Bureau
has not documented a present or future need associated
with  fish and wildlife habitat or outdoor recreation.
Further,   we   believe  that  adopting  the  Bureau's
interpretation that lands, if they may have habitat or
recreation  potential,  should  not  be  disposed  of,
appears to nullify the disposal requirements contained
in  the  Code  (41 CFR  101-47.8)  without  documented
justification.

The Bureau also  stated  that during the period of the
audit, 1993 to 1997, some Bureau offices had performed
field reviews of acquired  land  and  had  disposed of
acquired  land.  The Bureau cited the efforts  of  the
Ephrata Field  Office,  which reviewed 89,000 acres as
part of its Scattered Tracts  Resource Management Plan
and  which  was evaluating land uses  associated  with
Banks Lake in  the  Columbia  Basin Project as part of
another resource management planning  effort.   During
our  audit,  we  noted  the  reviews  conducted by the
Ephrata   Field   Office   as  part  of  its  resource
management planning.  However,   the identification of
unneeded land is normally not a part of such plans but
was included in the Scattered Tracts Plan only because
the   sale   of   "settlement  land"  was specifically
identified  as  a  project  purpose.   Therefore,  the
review was not part  of  a  systematic  real  property
review process but was performed only because the land
was  identified  for  sale  as  part  of  the  project
purpose.   In the case of the Banks Lake lands, Bureau
officials told  us  that  the resource management plan
would not address whether the land was needed.

The  Bureau  also  stated  that   "considerable  staff
resources  . . . [were] required to  effectuate  these
disposals" and that our final report "should recognize
that . . . Reclamation disposed of approximately 4,600
acres of acquired  land  with  a  current  fair market
value   of   over   $9,300,000."    During  our  audit
fieldwork, Bureau officials did not inform  us  of the
disposal  of the 4,600 acres.  Therefore, we contacted
the Bureau  after  receiving its response and inquired
about the specifics  of  these transactions.  However,
the Bureau was not able to  identify  the  projects or
parcels  involved  or  the  bases for the estimate  of
current fair market value.  As  a  result, we were not
able to verify the accuracy of the reported disposals.
However, we have added a paragraph to the report (page
6)  to  recognize the Bureau's comments.   The  Bureau
further stated,  "In  other  cases,  there  are  valid
reasons  why  the disposal of lands has not occurred."
In that regard,  the Bureau cited 19,589 acres of land
in  the  Oahe  Unit  being   retained  "pending  final
negotiations  with  the  State of  South  Dakota"  and
"`unused' lands associated  with  the  Gila  and Lower
Colorado River Salinity Control Acts."  Regarding  the
Oahe  Unit, we were not made aware during our audit of
the Bureau's  negotiations  with  the  State  of South
Dakota.   Regarding  the  Bureau's  retaining "unused"
lands  associated  with  the  Gila and Lower  Colorado
River Salinity Control Acts to  avoid the risk of real
estate  development  and  the concomitant  pumping  of
groundwater, we believe, and  Bureau officials agreed,
that these lands could be sold without water rights.

We  commend the Bureau for the actions  it  has  taken
regarding  the  review  and disposal of acquired land.
However,  these actions were  the  result  of  reviews
performed outside of the acquired land review process,
such  as disposals  initiated  by  local  governmental
agencies or private parties interested in obtaining or
using Bureau  land,  rather  than  the  result of real
property reviews conducted in a consistent and uniform
manner     in     accordance     with     regulations.
Notwithstanding  these  actions,  we  identified   the
67,220  acres  of  acquired  land as possibly unneeded
because no documented determination on use (current or
future) had been made by the Bureau at the time of our
audit.

The legislation, as amended, creating  the  Office  of
Inspector General requires semiannual reporting to the
Congress  on  all  audit  reports issued, the monetary
impact of audit findings (Appendix  1),  actions taken
to implement audit recommendations, and identification
of each significant recommendation on which corrective
action has not been taken.

We  appreciate  the assistance of Bureau personnel  in
the conduct of our audit.

**FOOTNOTES**

[1]:As used in this report, real property refers to the
land acquired by the Bureau for project purposes.

[2]:These facilities serve multiple purposes, including
irrigation, municipal and industrial water supply, power,
flood control, recreation, fish and wildlife mitigation
and enhancement, and navigation.

[3]:The  report "The Bureau of Reclamation Could Identify
More  Unneeded Land" (No. GAO/RCED-85-25), issued on April
12, 1985.

[4]:Our review did notconsist of a detailed examination
of all 178 Bureau projects.

[5]:The Bureau provided us with the draft  manual,  which
had  not been officially   approved   and  released  as
of  June  1998.   The  Manual reestablishes most of the
responsibilities  and requirements from prior Reclamation
Instructions.   Specifically,  it  states   that   regional
directors  and  area  managers  are  responsible  for
administering land resources under Bureau jurisdiction even
if management  of  the  land is transferred  to  another
entity;  specialized  use of the land, such as grazing,
is  allowed only if the use is compatible with  authorized
project purposes; private and semiprivate  long-term  use
of  the land, such  as  new  cabins,  clubs,  or  organized
camps, is not allowed; and reviews of land are required, at
a minimum,  every  5  years to identify health  and  safety
hazards,  trespasses,  lands  no longer needed  for project
purposes, and authorized uses that may no longer  be in the
best interest  of  the  public or the project.  However, the
Bureau  had  not established a date for  issuing  the draft
Reclamation Manual, as it was being revised at the time of
our audit.


APPENDIX 1

CLASSIFICATION OF MONETARY AMOUNTS

---------------------------------------------------------
                                                Potential
Finding                               Additional Revenues


Acquired Lands                               $17,454,317*
Identified  as  Possibly
Unneeded
---------------------------------------------------------


* Disposal may not always result in revenues to the U.S.
Treasury.  Before property is offered for sale to the
public, information about the property is circulated to
determine whether the property is needed by any other
Federal agency, including the Department of Housing and
Urban Development regarding its suitability for use by the
homeless.  In addition, Reclamation law frequently requires
that revenues from the sale of land be credited against
existing water district repayment obligations to expedite
the repayment of those contracts.


APPENDIX 2

BUREAU OF RECLAMATION
OFFICES VISITED OR CONTACTED

Office Location


Program Analysis Office Denver, Colorado

Mid-Pacific Regional Office Sacramento, California

Northern California Area Office Willows, California

Northern California Area Office* Shasta Lake, California

South-Central California Area Office Fresno, California

Lahontan Basin Area Office* Carson City, Nevada

Central California Area Office Folsom, California

New Melones Lake Field Office Sonora, California

Pacific Northwest Regional Office* Boise, Idaho

Upper Columbia Area Office* Yakima, Washington

Ephrata Field Office Ephrata, Washington

Snake River Area Office* Boise, Idaho

Great Plains Regional Office Billings, Montana

Eastern Colorado Area Office* Loveland, Colorado

Montana Area Office Billings, Montana

Nebraska-Kansas Area Office* Grand Island, Nebraska

Newell Field Office* Newell, South Dakota

Oklahoma City Field Office* Oklahoma City, Oklahoma

Lower Colorado Regional Office* Boulder City, Nevada

Yuma Area Office Yuma, Arizona

Phoenix Area Office* Phoenix, Arizona

Upper Colorado Regional Office* Salt Lake City, Utah

*Offices contacted

APPENDIX 3
Page 12 of  5


            ACQUIRED LANDS IDENTIFIED AS POSSIBLY UNNEEDED

-----------------------------------------------------------------
|        |                 |          |
|Estimated
|Region/ |Reasons for      |Questioned|Section, Township,
|Current
|Project |Questioning      |Acres     |    and Range
|Value2
|        |Need of Property1|          |                    |
-----------------------------------------------------------------
-----------------------------------------------------------------
Great Plains Region
-----------------------------------------------------------------
-----------------------------------------------------------------
Sun      Land is located        1,360      Sections 21, 27,
$272,000
River    outside of project                28, 33, and 34, T.
Project  boundaries and has                23 N., R. 1 W.;
         not been used for                 Section 2, T.  22
         project purposes.                 N., R. 1 W.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land around Willow     650        Sections 18, 19,
         74,131
         Creek Reservoir is                and 30, T. 21 N.,
         above capacity                    R. 6 W. and
         elevation and has                 Sections 23, 26
         not been used for                 and 35, T. 21 N.,
         project purposes.                 R. 7 W.
-----------------------------------------------------------------
-----------------------------------------------------------------
Mountain Land not located       160        Section 35, T.4
117,736
Park     within original                   N., R.17 W.
Project  project boundaries
         was identified as
         excess in 1978 and
         has not been used
         for project
         purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
Pick-Sloan Missouri Basin
Program
-----------------------------------------------------------------
-----------------------------------------------------------------
Narrows  Land is located        1,065      Section 28, T. 4
1,785,000
Unit     outside unit                      N., R.58 W.;
         boundaries and has                Sections 26, 27,
         not been used for                 and 35, T. 4 N.,
         project purposes.                 R. 59 W.; Section
                                           19, T. 4 N.,
                                           R. 60 W.; and
                                           Sections 14, 28,
                                           33, and 34, T. 5
                                           N., R. 60 W.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land represents        1,262    Sections 21 and
         1,675,949
         remaining acquired              28, T. 4 N., R. 58
         acres associated                W.; Sections 24,
         with the project                26, and 27,  T.  4
         that  was authorized            N., R.  59 W.; and
         in 1970 but was                 Section 18,  T.  4
         never constructed               N., R. 60 W.
         and, according to
         Bureau personnel,
         probably never will
         be.
-----------------------------------------------------------------
-----------------------------------------------------------------
Oahe     Unit has not been      19,589     The location of
7,034,606
Unit     completed as planned              the 225 acres used
         and, according to                 for fish and
         Bureau personnel,                 wildlife
         probably will not be              enhancement, a
         constructed.                      project purpose,
                                           was not
                                           identifiable in
                                           project files.
                                           The  19,589 acres
                                           consist of the
                                           remaining acquired
                                           project land.
-----------------------------------------------------------------
-----------------------------------------------------------------
Lower    Land around Elwell  3,500    Sections 5 and 6,
SectionsN.,
Marias   Lake is  above               R. 1  1,492,169  T. 29 N.,
Unit     capacity elevation           R. 5 E.; 20,E.;
         and not used for             Sections 1 and 2,
         27,Sections
         project purposes.            T. 29 N., R. 4 E.; 28,14,
         15,
                                      Sections 6, 7, 9,  and22,
                                      23,
                                      15, 16, 24, and    34,24,
                                      and
                                      25, T. 30 N., R. 1 T.25,
                                      T.
                                      E.; Sections 13,   3031 N.,
                                      14, 20, 21, 22,    N.,R. 3
                                      E.;
                                      23, and 28, T.  30 R.and
                                      N., R. 2 E.;       5
                                      Sections
                                      Sections 16, 17,   E.;29,
                                      30,
                                      and 18, T. 30 N.,
                                      Sections32,
                                      and R. 3 E.;    31,34, T.
                                      Sections 3, 15,    32,31
                                      N.,
                                      16, 17, 20, 26,    andR. 4
                                      E.
                                      29, and 30, T. 30  33,
                                      N., R. 4 E.;       T. 31
-----------------------------------------------------------------
-----------------------------------------------------------------
         Unit land was          8          Section 35, T. 30
         7,670
         identified as                     N., R.13 E.
         unneeded for project
         purposes in 1989 and
         is still in the
         Bureau's possession.

-----------------------------------------------------------------
Canyon   Land is used for a     146        Sections 28 and
274,358
Ferry    golf course and                   29, T.  7 N., R. 2
Unit     athletic field near               E.
         the City of
         Townsend, Montana,
         which were not
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land around Canyon     475        Sections 27, 34,
         168,925
         Ferry Reservoir is                and 35, T. 9 N.,
         above capacity                    R. 1 E.; and
         elevation and has                 Sections 2 and 11,
         not been used for                 T. 8 N., R. 1 E.
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------

1  Project  purposes are defined in individual project and
specific authorization laws and include  such uses as power,
irrigation, flood control, recreation, and fish and wildlife
mitigation and enhancement.

2  The estimated current value was obtained from the
Bureauwide automated real property   management   system
(Resource Information System),  which  uses  index coefficients
to compute an acceptable range for estimating the current value
of the Bureau's acquired lands, which  we accepted.  In addition,
for acreage without value in the real property system and land
purchased  for  water  rights, estimates were obtained from
regional and area office officials.  Further, there are various
costs that  will  be  incurred  with  the  sale of land,
such as costs for land survey and appraisal and environmental and
historical  research,  which  we  could not quantify during our
review.

APPENDIX 3
Page 12
of  5

-----------------------------------------------------------------
Lower Colorado Region
-----------------------------------------------------------------
-----------------------------------------------------------------
Gila     Land was idle and      2,760      Section 15, T. 9
690,0003
Project  has not been used                 S., R. 19 W.;
         for project                       Sections 2, 11,
         purposes.                         and 12, T. 8 S.,
                                           R. 22 W.; and
                                           Sections 16, 33,
                                           34, and 35, T. 8
                                           S., R. 16 W.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land was used as       1,770      Sections 26, 28,     4
         part of a bombing                 29, 33, and 36, T.
         range by the Air                  9 S., R. 18 W.
         Force and has not
         been used for
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
Colorado Land was idle and    |grove.    2,995   Sections9
and748,7505
River    has not been used    |                  13,10,
Basin    for project          |                  14,T. 9 S.,
Salinity purposes.  In        |                  15,R. 18
Control  addition, the Area   |                  andW.; and
Project  Office incurred      |                  27,Sections
         trespass-related     |                  T.3 and
         administrative       |                  8 11, T.
         burden because of    |                  S.,11 S.,
         three trespasses.    |                  R.R. 23 W.
         One trespasser has,  |                  16
         since 1996, used     |                  W.;
         over 1 acre of this  |                  Section 25,
         unneeded Federal     |                  T.
         land to farm         |                  8
         alfalfa, store       |                  S.,
         equipment, and       |                  R. 17 W.;
         extend his citrus    |                  Sections
-----------------------------------------------------------------
-----------------------------------------------------------------
Mid-Pacific Region
-----------------------------------------------------------------
-----------------------------------------------------------------
Orland   Land around Stony      440        Sections 15, 21,
253,773
Project  Gorge Reservoir is                22, and 28, T. 20
         above capacity                    N., R. 6 W.
         elevation and has
         not been used for
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land around East       250        Sections 34 and
         77,988
         Park Reservoir is                 35, T. 18 N., R.
         above capacity                    6 W.; and Sections
         elevation and has                 3, 15, and 23,
         not been used for                 T. 17 N., R. 6 W.
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
Humboldt Land was obtained      29,000     Battle Mountain
2,000,0006
Project  for water rights and              Community Pasture
         has not been used                 in T. 32 N., R.
         for project                       44, 45, 46, and 47
         purposes.                         E.; T. 33 N., R.
                                           44 and 45 E.; and
                                           T. 34 N., R. 44 E.
-----------------------------------------------------------------
-----------------------------------------------------------------
Central Valley Project
-----------------------------------------------------------------
-----------------------------------------------------------------
New      Land was identified    432        Sections 8 and 17,
390,838
Melones  as excess in 1992,                T.  1 N., R. 13 E.
Unit     has not been used
         for project
         purposes, and has
         not been disposed
         of.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land is located        150        Section 31, T. 3
         127,729
         outside unit                      N., R. 14 E.
         boundaries and has
         not been used for
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
Friant-  Eight parcels of       17         Section 26, T. 13
119,603
Kern     land along the                    S., R. 23 E.;
Canal    Canal, ranging in                 Section 9, T. 12
         size from .71 acre                S., R. 26 E.;
         to 5.7 acres, were                Section 6, T. 29
         identified as excess              S, R. 27 E.;
         in 1989 and have not              Section 12,
         been disposed of.                 T. 15 S, R. 24 E.;
                                           Section 13, T. 18
                                           S., R. 26 E;
                                           Section 4, T. 25
                                           S., R. 26 E.; and
                                           Sections 25 and
                                           26, T. 28 S., R.
                                           26 E.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Land was identified    28         Section 18, T. 12
         25,201
         as excess in 1984,                S., R. 22 E.
         has not been used
         for project
         purposes, and has
         not been disposed
         of.
-----------------------------------------------------------------
-----------------------------------------------------------------
         Trespassed land is     3          Section 29, T. 15
         3,471
         not needed for                    S., R. 25 E.
         project purposes.
-----------------------------------------------------------------
-----------------------------------------------------------------
Shasta   Land is located        300        Section 27, T.  35
60,489
Division outside the existing              N., R. 5 W.
         boundaries of the
         Whiskeytown-Shasta-
         Trinity National
         Recreation Area and
         has not been used
         for project
         purposes.  The
         identified land
         is currently managed
         by the U.S. Forest
         Service.
-----------------------------------------------------------------
-----------------------------------------------------------------

6Estimated current value was adjusted to reflect exclusion
of water rights.

APPENDIX 3
Page 12 of  5

-----------------------------------------------------------------
Pacific Northwest Region
-----------------------------------------------------------------
-----------------------------------------------------------------
Columbia The lands are          |860       Sections 9, 11,
|53,931
Basin    portions of parcels    |          14, 20, 21, and     |
Project  originally purchased   |          29, T. 25 N., R.    |
         to the nearest 40-     |          28 E.; Sections 1,  |
         acre boundary and      |          22, 23, 24, 27,     |
         are located above      |          and 34, T. 26 N.,   |
         the cliff wall         |          R. 28 E.; Sections  |
         around Bank's Lake.    |          8, 18, and 19,      |
                                |          T. 26 N., R. 29     |
                                |          E.; Sections 12,    |
                                |          14, 17, 20, 22,     |
                                |          23, 30, and 31, T.  |
                                |          27 N., R. 29 E.;    |
                                |          Section 7, T. 27    |
                                |          N., R. 30 E.; and   |
                                |          Section 22, T. 28   |
                                |          N., R. 30 E.        |
-----------------------------------------------------------------
-----------------------------------------------------------------
                       Totals   |67,220
                       |$17,454,317
-----------------------------------------------------------------
-----------------------------------------------------------------

6Estimated current value was adjusted
to reflect exclusion of water rights.

APPENDIX 4
Page 1
of 4

6Estimated current value was adjusted
to reflect exclusion of water rights.

APPENDIX 4
Page 1 of 4

6Estimated current value was adjusted
to reflect exclusion of water rights.

APPENDIX 4
Page 1 of 4

6Estimated current value was adjusted
to reflect exclusion of water rights.

APPENDIX 4
Page 1 of 4

6Estimated current value was adjusted
to reflect exclusion of water rights.

APPENDIX4
Page  1 of 4

APPENDIX 5

         STATUS OF AUDIT REPORT RECOMMENDATIONS

     --------------------------------------------------------
      Finding/
     Recommendation
     Reference   Status        Action Required

     --------------------------------------------------------
     1, 2, and   Resolved;     No further response to the
     3           not           Office of Inspector General is
                 implemented   required.  The recommendations
                               will be referred to the
                               Assistant Secretary for
                               Policy, Management and Budget
                               for tracking of
                               implementation.
     --------------------------------------------------------

6Estimated current value was adjusted
to reflect exclusion of water rights.




ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED

TO THE OFFICE OF INSPECTOR GENERAL BY:

Sending written documents to:



Within the Continental United States

U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240

Calling:

Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300

TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996



Outside the Continental United States


Caribbean Region

U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209

Calling:
(703) 235-9221


North Pacific Region

U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910


Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279