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Show basis. Such legislation would make possible the handling of rate problems as though the entire de- velopment were a single undertaking. The pooling of costs, however, assumes that economic justifi- cation of individual projects has been made for au- thorization. (2) The statutory basis for marketing policies should be made uniform. The marketing policies of the Bonneville Project Act22 represent to a large degree policies that have been adopted administra- tively for use in the case of projects governed by less specific statutes. It is suggested that marketing policies like those of the Bonneville Project Act, modified or elaborated as necessary, be made ap- plicable to the marketing of power from all Fed- eral projects in the basin. (3) In order to provide the flexibility in use of revenues necessary for the integrated operation of a power system in the Columbia River Basin, it is suggested that revenues from the sale of power be used to pay the cost of generating and transmit- ting power. Authority for use of the continuing fund of the Bonneville Act should be expanded to include the use of revenues for the operation, maintenance, and administrative expenses of gen- erating, transmitting, and disposing of power (in- cluding payments for the purchase of energy inci- dental to such activity), and for the modification of or additions to customer service facilities required for the continuation of service. Full accountability for efficient and economic operation should be re- quired. Perhaps this could be achieved by a re- quirement for submission to the Congress annually of a budg-et covering these matters. 2. Standardization of Accounting The Problem Standardization and simplification of account- ing practices so that the accounts and reports of the several agencies and for the various programs will be available to and intelligible to the taxpayer. The Situation Any consideration of costs and repayment of costs can "be greatly influenced by the nature of the accounting practices involved. At several points accounting practices of the various Federal agencies 22 Act of August 20, 1937, § 4, 50 Stat. 731, 733, 16 U. S. C. 832c. in the Columbia Basin are somewhat inconsistent. Early agreement is desirable in the public interest. At the Bonneville Dam project, the accounts re- flect all costs including interest and depreciation for all features of the project whether or not they are specifically reimbursable. All expenses for oper- ation, maintenance, depreciation, and interest are set forth. In this way all costs for other features, even though they are nonreimbursable, are set forth, so that all costs are accounted for. Only the power costs of the Columbia Basin Project are subject to complete cost accounting sim- ilar to that at the Bonneville Project. Interest and depreciation accounts are not kept for the irriga- tion activities, nor with respect to the joint facilities charged to any other purpose than power. Another difficulty is added when costs are charged to financial requirements as the result of specifically fixed payment periods and the fixing of power rates by the Congress. Financial require- ments are whatever the statute may specify, and may not reflect all actual costs. For power fea- tures this necessitates keeping two complete sets of books, because the law requires that the Federal Power Commission system of accounts (e. g., full accrued accounting) be followed for power. How- ever, it makes comparative appraisal of the accounts and reports difficult for anyone except an expert thoroughly acquainted with the particular statutory and administrative situation. Two other accounting features involving interest further complicate the appraisal of project ac- counts and reports: (1) Interest rates charged to the projects differ in accord with different statutes; (2) some cost accounts include interest charges during the period of construction while others do not. If either the repayment period or the construction period is long, variations in prac- tice with respect to interest will result in great differences in the costs of the project. Conclusions The universal practice in the commercial world and the only type of accounting generally under- stood by the public is full accrued accounting. It is recommended that all accounts be on the accrued accounting system. This would include interest at some standard rate, interest during period of con- struction, all operation and maintenance costs, and all other direct and overhead costs. Unless this is done, all statements of costs are largely meaningless to the general public. 66 |