Washington, DC…We evaluated the Bureau of Reclamation’s (USBR’s) financial assistance agreements for the State of California’s Bay Delta Conservation Plan (BDCP) to determine whether USBR fully disclosed to the U.S. Congress and other stakeholders the cost of its participation in BDCP efforts, whether USBR had legal authority to convert funds from reimbursable to nonreimbursable purposes, and whether USBR expended funds in accordance with its legal authority for its financial assistance agreements.

We found that USBR did not disclose the full cost of its participation in the BDCP, subsidized CVP water contractors, and converted $50 million in Federal funds from reimbursable to nonreimbursable without documentation to support its determination that the funds should be nonreimbursable. Further, while USBR had the legal authority for its financial agreements, USBR’s use of funds for one agreement was not consistent with its authority under the Fish and Wildlife Coordination Act.

We made four recommendations to address the weaknesses in USBR’s policies and procedures that allowed USBR not to disclose to Congress and other stakeholders that $50 million in Federal funds were used for the BDCP and that these funds would not be returned to the U.S. Treasury as expected. USBR did not concur with our recommendations, but we consider the basic objective of Recommendations 1, 2, and 4 to have been achieved because (1) USBR committed to no longer provide funds to DWR for future BDCP efforts unless appropriated funds are specifically requested for that purpose; (2) USBR’s nondisclosure to Congress and other stakeholders the full cost of its participation in the BDCP has been disclosed through our report; and (3) USBR’s submission of inaccurate annual Calfed Bay-Delta certified financial reports has now been disclosed through our report. Further, we believe USBR’s commitment regarding appropriated funds for the BDCP is acknowledgement of the validity of our findings that the actions it took to fund BDCP planning costs were neither transparent nor consistent with the “beneficiaries pay” principle underlying Reclamation Law.

We consider Recommendations 1, 2, and 4 to be resolved and implemented. We consider Recommendation 3 to be unresolved and not implemented and are referring this recommendation to the Assistant Secretary for Policy, Management and Budget for resolution.

PDF