During an audit of the Bureau of Reclamation’s (USBR) Klamath Basin Water User Mitigation Program, the U.S. Department of the Interior, Office of Inspector General found that USBR allocated 37.5 percent of the annual cost to operate and maintain (O&M) the Klamath Project’s reserved works to flood control and ceased collecting these costs from Project contractors. This allocation does not conform with USBR policy that purports to be based upon applicable statutes. As a result, we estimate that USBR did not collect a total of $5.6 million in O&M costs during the time period 1975 – 2015. In addition, if USBR does not begin collecting the entire amount of annual O&M costs from Project contractors, we estimate approximately $13.9 million in forgone revenues over the next 30 years.
Because this matter is outside the objective and scope of our audit and not included in our final report, we provided a management advisory with one recommendation to USBR to fully review the matter and take corrective action.