Postponed/Cancelled Capital Projects - River Operations

As part of our annual audit plan, we reviewed the process for postponing and cancelling capital projects. Our objectives were to determine whether fiscal years 2007 and 2008 project postponements and cancellations for River Operations (RO) were properly approved, effectively communicated, and monitored to prevent inappropriate charges. We determined all sampled cancelled capital projects reviewed were approved by the appropriate levels of authority and contained a capital classification designated by Fixed Asset Accounting (FAA). However, we noted that project documentation was not updated with changes in project status as required. In addition, we determined that one project cancellation was not communicated to FAA; however, we noted that costs related to the project were written off in a timely manner. We made recommendations to address the above findings. The RO Senior Vice President responded to a draft report and agreed with our recommendations. The RO Senior VP also provided planned actions in addressing those recommendations.