Bureau of Indian Affairs' Participation in a Proposed Hydroelectric Facility at Kootenai Falls, MT

The Department of the Interior's Bureau of Indian Affairs (BIA) has an agreement with a group of electric cooperatives to pay up to 10.5 percent of the costs of determining the feasibility of, and obtaining a license for, constructing and operating a hydroelectric power generating facility at Kootenai Falls, Montana. Within BIA, the Flathead Indian Reservation Irrigation and Power Project has responsibility for administering the agreement. Pursuant to a congressional request, GAO reviewed BIA participation in the venture to determine whether federal funds were properly spent.

GAO found that, while BIA partially paid for its share of the feasibility study and license application costs with reprogramed funds, the reprogramming of these funds was not reported to Congress. In addition, GAO found that BIA improperly used revenues from the Flathead Project to help pay its share of the costs of the Kootenai Falls venture. GAO also found that internal controls for the Flathead Project were inadequate in that: (1) the financial staff for the Flathead Project was not sufficiently trained or experienced in the financial management of such a complex project; and (2) since the Flathead Project's administrative officer position became vacant, project engineers have had responsibility for reviewing, approving, and certifying all financial transactions, in addition to authorizing project expenditures. As a result of financial management problems and tribal opposition to the Kootenai Falls venture, BIA has suspended its participation in the venture pending a determination by Interior's Solicitor as to the appropriateness of BIA participation. In addition, the staff and an administrative law judge of the Federal Energy Regulatory Commission have recommended that the Federal license for construction and operation of the Kootenai Falls facility be denied, but GAO believes that litigation could delay a final decision on the license for several years.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Michael Gryszkowiec Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 275-5514