EXPLANATION OF ASSETS AND LIABILITIES

The significance of the data shown in the statements of assets and liabilities for projects will be better understood after consideration of the following explanation of the items entering into the foregoing general statement of assets and liabilities.

The several items appear in the statement of assets and liabilities in the order in which they can or must be liquidated.

The accounts receivable are shown under seven heads, as follows: Uncollected freight refunds, consisting of claims against railroads for contract concessions upon freight moved for contractors on irrigation work; uncollected water rentals, consisting of claims against irrigators for water furnished under rental contract; uncollected miscellaneous rentals, consisting of claims against the lessees of lands or buildings under the control of the service; uncollected miscellaneous, consisting of claims against contractors or other persons for services or materials furnished that will be deducted from current earnings by them; collections by General Land Office, consisting of collections of water-right building and operation and maintenance charges by special fiscal agents and transmitted to local land offices but not yet covered into the Treasury by the receivers of land offices; uncollected water-right building charges and uncollected water-right operation and maintenance charges, consisting of claims against water-right applicants for the portions of annual installments of water-right charges that have accrued under their applications but that have not become delinquent.

The inventories are self-explanatory, but an explanation of the methods of handling these accounts will make them more easily understood. With the regular use of Government equipment there is a deterioration in value that should be written off from these asset accounts and included with that of cost of work. Actual depreciation is determined from time to time by surveys and appraisals or by sale, but pending such determination estimated wear and tear is credited to the respective accounts for depreciation and debited to cost of work, to be more accurately adjusted when appraisals or sales are made. Unadjusted transfers are for materials or services furnished by one project to another for which the vouchers have not been checked so as to warrant their entry to the proper accounts under inventories or cost of work.

Cost of work represents the outlay upon the net asset in the irrigation projects, for which reimbursement will later be required from the water-right applicants. The bulk of the outlay is shown in the two accounts, building cost and operation and maintenance cost. Table 17 shows the cost of each project for building and operation and maintenance. The amount appearing in these two accounts is analyzed for each project in a subsidiary statement that shows the cost of the principal physical features. A table showing an analysis of these costs by features is given in this report under each project. In computing the current costs for such features there are certain expenses that can not be accurately determined when incurred, but that are estimated as closely as possible, subject to readjustment at a later time. The expenses that must be thus estimated do not represent a large proportion of the cost of any feature of the work, but are numerous and varied in kind. Most of them arise from what are

known as incidental operations, such as power plants, manufacturing shops, storehouses, mess houses, mercantile stores, etc. The net gain or loss on such operations is a decrease or increase of the actual cost of the project and of the features to which they have contributed. It is usually impracticable to revise and readjust the charges made for the benefits that these incidental operations have contributed to the various features, and therefore the gains or losses are applied only to the cost of the project as a whole. The projects derive various revenues from dealings with the general public, such as rentals of lands and buildings, payment for services performed at its manufacturing shops, rentals of irrigating water, etc. These revenues do not reduce the original cost of the features whose operations produce the revenues, but they do reduce the cost of the entire project. The net cost of a project is therefore obtained from the building cost, operation and maintenance cost, adjustments, and revenues.

The capital account represents the indebtedness of the service to the United States. The reclamation fund is ultimately reimbursable and therefore a liability. The amount of the liability would be the total amount appropriated to it, except that the acts of April 16 and June 27, 1906 (34 Stat., 116, 519), make the disbursements therefrom for the development of certain town sites a final expenditure that is not repayable to the service and accordingly not reimbursable to the United States. The total amount of such expenditures for town-site operations to June 30, 1911, is $12,997.05. The law, furthermore, makes no provision for the return to the reclamation fund of amounts expended on the investigation of projects that prove ultimately to be not feasible.

The accounts payable are shown under ten heads, as follows: Unpaid labor, consisting of claims in favor of employees for services performed, the greater part of which is always paid on or before the tenth of the following month; unpaid purchases, consisting of claims in favor of merchants for current bills, most of which are paid during the following month; unpaid contract estimates and unpaid contract holdbacks, both consisting of claims in favor of contractors upon construction work, the former representing the amount now due and that will be paid as soon as settled by the auditor, and the latter representing the amount withheld until the completion of the work under the provisions of the contract; unpaid freight and express and unpaid passenger fares, consisting of claims in favor of transportation companies, both representing the estimated indebtedness for transportation furnished by carriers, the respective charges being secured for freight from delivering agents' expense bills, for express from deliving agents' oral statements of the charges, and for passenger fares from ticket sellers' oral statements of the fares; unpaid land agreements, consisting of claims in favor of the grantors of real property upon negotiated contracts for the acquisition of their titles and not payable until complete investigation of such titles and final determination of the exact amounts payable to the grantors; unredeemed coupon books and meal tickets, consisting of employees' claims that are not payable in cash except upon discharge, but for which they are entitled to receive appropriate issues at the mercantile stores and mess houses; and unpaid miscellaneous, consisting of claims payable in cash that do not properly come within the limits of the foregoing classes of liabilities.

The repayment accounts are set forth separately and treated as liabilities, as it is desirable to show the total amount of repayments accrued. They might, perhaps, very properly be considered as a reduction of the asset account "cost of work," since that account, as an asset, is reduced by repayments.

ENGLE DAM

The act of March 4, 1907 (34 Stat., 1357), provided an appropriation of $1,000,000 toward the construction of a dam in the bed of the Rio Grande for storing and delivering water, as provided by a convention between the United States and Mexico. Tables 21, 22, and 23 show the transactions under this appropriation and its condition on June 30, 1911, and are similar to the tables relating to the reclamation fund.

TABLE 21.-Special appropriation for Rio Grande (Engle) Dam (34 Stat., 1357) to June 30, 1911

TABLE 22.—Balances of appropriations for Rio Grande (Engle) Dam with Treasurer of the United States, June 30, 1907, to June 30, 1911 1

1 The appropriations and balances shown in this table for the fiscal years 1907, 1908, 1909, 1910, and 1911 are taken from the books and financial statements of the Treasury Department.

TABLE 23.-Disbursement and collection vouchers, appropriation for Rio Grande (Engle) Dam, paid and collected to June 30, 1911

The Treasury Department, in a letter to the Secretary of the Interior, dated December 18, 1909, authorized the opening of an account known as the "reclamation deposit account," in which are deposited to the official credit of the special fiscal agent of the Reclamation Service, located at Washington, D. C., the amounts of all certified checks received with proposals to insure the execution of contracts and bonds in the event of the proposals being accepted. After award of contract and execution of bond by a successful bidder, the amounts deposited by all bidders under the same advertisement are returned by check of the special fiscal agent. The account was opened May 31, 1910. Transactions in this account are shown by tables 24 and 25.

TABLE 24.—Receipts and payments from reclamation deposit account during fiscal year

TABLE 25.—Items included in balance of $26,800, given in Table 24

UNIT PRICES UNDER FORMAL SPECIFICATIONS

In the table following are given the principal unit prices bid for work and materials and contract unit prices therefor in connection with formal specifications, proposals for which have been received by the Reclamation Service during the fiscal year ending June 30, 1911. Formal specifications issued during the year include those numbered from 165 to 190, inclusive. In almost all cases contracts have been awarded to the lowest bidder, but as the contracts have been awarded on definite devisions of the work as a whole, it has frequently happened that the contract price for a particular item is higher than the lowest bid on that item. Unit bids and contract prices for cement, explosives, headgates, machinery, and electrical equipment are not included in this table.