Hydropower Project Cost Accounting Procedures Implementation
 
 

Background Pursuant to the Federal Power Act, the Service provides technical assistance to the Federal Energy Regulatory Commission on hydropower licensing projects through general program funds appropriated in the Resource Management appropriation, Ecological Services Budget Activity, Habitat Conservation, General Activities subactivity. Occasionally, other Service programs may provide technical or operational expertise on hydropower projects. It is important that our cost reporting captures costs incurred by other programs that are in direct support of FPA activities. Under the FPA, FERC is required to recover the costs that the Federal government incurs for the costs of administering the FPA FERC recovers these costs through licensing fees levied on hydropower companies. As part of this process, the Service and other Federal agencies annually report their costs to FERC related to hydropower projects. Some licensees have filed appeals with FERC, alleging inadequate evidence to support billings. in addition, the General Accounting Office issued a report in 2000 stating that FERC had issued inadequate cost reporting guidance and that agencies did not adequately account for all costs related to FERC projects. Department-wide guidance on accounting and reporting FPA costs was issued in September 2001. As a result, the Service developed the following procedures to implement the Departmental guidance to accurately document certified costs reported to FERC. Implementation Guide Based on the Department's Cost Accounting Procedures and Guidance for hydropower activities, this guidance provides Service procedures to be used to accumulate the costs, both direct and indirect, for hydropower projects. As explained in the Service's Cost Recovery Policy, FWS Manual 264, direct costs are costs which can be specifically identified with a provided service or product. Examples include salary, travel, equipment, and supply costs that are directly associated with a project. Indirect costs are costs which cannot be identified with a specific provided service or product but which support the project. These costs may include such things as space rental, telephone service, postage, radio systems, as well as regional and headquarters office administrative support. Project Numbers Each Region will maintain three FERC project codes to be applied to the appropriate subactivity account number, (i.e., 1122, 1311) to charge salaries, travel, equipment, and other direct costs. Project managers should ensure employees charge the applicable project codes for their work on hydropower activities. These three FERC project codes should be made available to all Service programs conducting work under the FPA.   Municipal Hydropower Projects - Direct costs benefitting licensing activities traced specifically to municipal licensing activities. The term municipal includes all domestic non-Federal government entities such as states, cities, counties, etc. Field and Regional organizations are to utilize the following project codes for municipal projects as shown in Table 1. Non-Municipal Hydropower Projects - Direct costs benefitting licensing  activities traced specifically to non-municipal licensing activities. Field and Regional organizations are to utilize the following project codes for non-municipal projects as shown in Table 1. Nonspecific Hydroelectric Projects - Direct costs benefitting all licensing projects but not uniquely or directly attributable to municipal or non-municipal activities. Examples include salaries and benefit costs for meetings with the Department, FERC, GAO, or other entities to discuss hydropower projects. However, the meetings are not directly tied to specific municipal or non-municipal projects. Field and Regional organizations are to utilize the following project codes for non-specific projects as shown in Table 1.

 
 

Table 1:  Hydropower Project Codes

		Project Codes
Region	Municipal	Non- Municipal	Non- Specific
1	1MUN	1PUB	1COM
2	2MUN	2PUB	2COM
3	3MUN	3PUB	3COM
4	4MUN	4PUB	4COM
5	5MUN	5PUB	5COM
6	6MUN	6PUB	6COM
7	7MUN	7PUB	7COM
9	9MUN	9PUB	9COM

Service personnel should consult their Regional Hydropower Coordinators for additional information or clarification on project type designations when necessary. Responsibilities of Service Personnel Working on Hydropower Projects Service personnel must ensure that direct costs in the areas of salaries, benefits, travel, and materials related to hydropower projects are charged to one of the three regional FERC project codes. Therefore, time worked on a FERC-related project must be recorded on the applicable Service personnel's time sheet. Any materials purchased and directly used for the project must be charged to the applicable hydropower project code. Accounting for Direct and Indirect Costs Direct project costs will be charged in the Federal Financial System to one of three Regional project codes. All Regional costs must be recorded through FWS using the Region's applicable project code. For reporting purposes, the Non-Specific costs will be allocated between the Municipal and Non-Municipal project costs. The percentage to allocate will be based on the amounts in the Municipal and Non-Municipal accounts. For example, if Municipal project costs total $6 minion and Non-Municipal project costs total $4 million, the Non-Specific costs would be allocated as 60 percent to Municipal and 40 percent to Non-Municipal. All Service indirect costs will be calculated by the Branch of Federal Activities, Division of Federal Activities, Fisheries and Habitat Conservation Division. The Service will apply its standard indirect cost rate, currently 20 percent, to the total direct costs. Further, the Service must include the applicable Departmental indirect cost rate, currently 16.8 percent, on the direct labor and benefit costs. The total costs for Municipal and Non-Municipal activities will be totaled and reported to the Department. The Department requires that the report be certified as accurate by the bureau level Chief Financial Officer and all related records be maintained for seven years. The certified reports are to be submitted to the Office of Financial Management MS-5412 MIB by May 1, of each fiscal year. Effective Date These procedures will be effective as of date of signature. Its provisions will remain in effect until further notice. Questions regarding this information may be directed to the Division of Federal Program Activities (Robin Nims Elliott) at 703-358-2183 or the Division of Finance (Chris Jensen) at 703-358-1742.