Rural Water Projects

Federal Assistance Criteria and Potential Benefits of the Proposed Lewis and Clark Project Gao ID: T-RCED-99-252 July 29, 1999

GAO has issued two reports during the last year on rural water projects. One report looked at the characteristics of several proposed rural water projects and compared them with the criteria of several existing programs for funding assistance. (See GAO/RCED-98-204R, May 1998.) One of the projects covered in that report was the proposed Lewis and Clark project in South Dakota, Iowa, and Minnesota. The other report focused on the benefits that could be expected from such a project. (See GAO/RCED-99-115, May 1999.) This testimony, which draws on GAO's earlier work, covers (1) the federal assistance criteria for rural water projects and (2) the potential benefits of rural water projects, such as Lewis and Clark.

GAO noted that: (1) regarding federal assistance criteria for rural water projects, GAO's work looked at three programs; (2) these were the Rural Utilities Service Program of the Department of Agriculture (USDA), the Drinking Water State Revolving Fund of the Environmental Protection Agency (EPA), and the Bureau of Reclamation (BOR) of the Department of the Interior; (3) GAO found that the USDA and EPA programs had specific criteria that a proposed water project must meet to be considered for funding and that none of the three projects GAO examined, including the Lewis and Clark project, had characteristics that met all of the criteria of any one of the programs; (4) GAO further found that while BOR did not have a formal program and, thus, did not have formal criteria, it did have a long-standing policy on reimbursement for its contributions to projects with which none of the three proposed projects-again including Lewis and Clark-could comply; (5) regarding potential benefits of rural water projects, GAO's work, using Lewisand Clark as the example, found that the local water users, such as households and business would receive most of the benefits of the project, which could include higher personal incomes and improved lifestyles; and (6) while the federal government would realize only minimal financial benefits, the project would benefit the federal government to the extent that it will be a means of achieving public policy objectives.

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