Summary

GAO reviewed small purchase procurements of the Federal Energy Regulatory Commission (FERC) in regard to the Trans-Alaska Pipeline System (TAPS) rate case.

GAO noted that FERC spent over $179,000 in documenting the TAPS project which was originally estimated to cost about $1 billion but actually cost about $9.4 billion. GAO found that the FERC lack of management controls over the procurement and accounting aspects of the TAPS discovery effort resulted in: (1) erroneous certification regarding the status of appropriated funds, (2) unauthorized payments, (3) additional interest costs to the Government, (4) violations of both Federal and Department of Energy (DOE) procurement regulations and DOE accounting procedures, and (5) frequent deviations from FERC small purchase procedures. GAO believes that, if management had developed and documented procedures and supplemented them with guidelines and accounting controls, the adverse results could have been avoided.