ARMY CORPS OF 

ENGINEERS

Actions Needed to 

Improve Cost Sharing 

for Dam Safety 

Repairs

Report to Congressional Requesters

December 2015

GAO-16-106

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-106, a report to 

congressional requesters

December 2015

ARMY CORPS OF ENGINEERS

Actions Needed to Improve Cost Sharing for Dam 

Safety Repairs

Why GAO Did This Study

The Corps operates over 700 dams, 

which are aging and may require major 

repairs to assure safe operation. At 

some dams, sponsors that benefit from 

dam operations share in the cost of 

operating and repairing these dams 

based on original congressional 

authorizations for dam construction or 

subsequent agreements with the 

Corps. Since 2005, the Corps initiated 

an estimated $5.8 billion in repairs at 

16 dams with urgent repair needs; 

sponsors are to share repair costs at 9 

of these dams.

GAO was asked to examine cost 

sharing for Corps dam safety repairs. 

This report examines how, over the 

last 10 years, the Corps (1) determined 

cost sharing and (2) communicated 

with sponsors regarding cost sharing. 

GAO reviewed relevant laws and 

Corps regulations; analyzed dam 

safety projects’ documentation for the

16 dams the Corps selected for repairs 

since 2005; conducted site visits to a 

non-generalizable sample of three

dams based on cost share 

determinations and range of sponsors; 

and interviewed Corps officials and

sponsors.

What GAO Recommends

GAO recommends that the Corps 

clarify policy guidance on (1) usage of 

the state-of-the-art provision and (2) 

effective communication with sponsors

to establish and implement cost 

sharing agreements for all dams, 

including the three named in this 

report. The Department of Defense

concurred with GAO’s 

recommendations.

What GAO Found

The U.S. Army Corps of Engineers (Corps) determined sponsors’ (such as water 

utilities and hydropower users) share of costs for dam safety repairs pursuant to

regulations, but did not apply a provision in a statutory authority that reduces

sponsors’ share. The Corps determined these cost shares based on analyses of 

the potential ways each dam could fail, and in consideration of statutory

requirements regarding which type of cost sharing arrangement, or authority, 

would apply given these possible failure scenarios. 

• The Corps applied its Major Rehabilitation authority at 11 of the 16 dam safety 

repair projects GAO reviewed for repairs associated with typical degradation of 

dams, such as embankment or foundation erosion through seepage. Under this 

authority, sponsors are to pay their full agreed-upon cost share of the repair.

• The Corps applied its Dam Safety Assurance authority at 5 of the 16 dam 

safety repair projects GAO reviewed for repairs that resulted from the 

availability of new hydrologic or seismic data. Under this authority, sponsors’

agreed-upon cost share is reduced by 85 percent. 

The Corps did not apply one provision of its Dam Safety Assurance authority—

related to repairs needed due to changes in state-of-the-art design or 

construction criteria (state-of-the-art provision)—since the enactment of the 

enabling legislation in 1986. Since that time, the Corps has not provided 

guidance on the types of circumstances under which the state-of-the-art 

provision applies and has not had a consistent policy position regarding the 

provision. For example, the Corps’ latest regulation states in one section that the 

state-of-the-art provision will not be applied because of the difficulty in defining 

terminology, while another section allows for consideration on a case-by-case 

basis. Without clarifying the circumstances under which the state-of-the-art 

provision applies, and implementing the policy consistently, the Corps is at risk of 

not applying the full range of statutory authorities provided to it, contributing to 

conditions under which, as discussed below, sponsors have taken actions 

opposing the Corps.

In GAO’s review of 9 dams with sponsors, the Corps did not communicate with or 

effectively engage all sponsors. For example, a federal sponsor that markets 

hydropower generated at two dams disagreed with the Corps’ decision to not 

apply the state-of-the-art provision of its Dam Safety Assurance authority, which, 

if used, would reduce this sponsor’s cost share by about $410 million. This 

sponsor has proceeded to set its power rates in anticipation of paying the 

reduced cost share, creating uncertainty for the recovery of federal outlays for 

repairs. In addition, GAO found the Corps was not effective in reaching 

agreement with other sponsors on cost-sharing responsibilities at three dams

because it did not have clear guidance for effectively communicating with 

sponsors. For example, the Corps did not engage a sponsor to ensure cost share 

payment at one dam and, at another dam, delayed executing agreements that 

would ensure sponsors’ cost shares. Because the Corps did not effectively 

engage these sponsors, some are deriving benefits absent agreements with the 

Corps, while others that have agreements have not been notified of their final 

cost-sharing responsibility. As a result, these sponsors’ cost share payments 

(about $3.1 million) are uncertain.

View GAO-16-106. For more information, 

contact Lori Rectanus at (202) 512-2834 or 

rectanusl@gao.gov.
Page i GAO-16-106 Army Corps of Engineers

Letter 1

Background 3

The Corps Has Determined Cost Sharing Based on Ways in 

Which a Dam May Fail, but Has Not Applied One Provision 

That Reduces Sponsors’ Cost Share 10

Some Corps Districts Did Not Communicate with Sponsors or 

Engage Them Effectively, Potentially Reducing Payments 

Received from Sponsors 15

Conclusions 22

Recommendations 23

Agency Comments 23

Appendix I List of Sponsors Interviewed 25

Appendix II List of 16 Dam Safety Repair Projects Reviewed 26

Appendix III Comments from the Department of Defense 29

Appendix IV GAO Contact and Staff Acknowledgments 33

Tables

Table 1: Cost Sharing Payment Mechanisms and Recipients for 

Federal and Non-Federal Sponsors of the U.S. Army 

Corps of Engineers’ Dam Safety Repair Projects 10

Table 2: Hypothetical Cost Sharing Example of a $50-Million Dam 

Safety Repair Project with 10 Percent Sponsor Cost 

Share 12

Table 3: List of 10 Sponsors Interviewed 25

Figures

Figure 1: Illustration of Dam Types and Features 5

Figure 2: Center Hill, TN, (left) and Wolf Creek, KY, Dams 17

Contents
Page ii GAO-16-106 Army Corps of Engineers

Abbreviations

ASA(CW) Assistant Secretary of the Army for Civil Works

Corps U.S. Army Corps of Engineers

DSAC Dam Safety Action Classification 

DOD Department of Defense

DSO Dam Safety Officer 

IWTF Inland Waterways Trust Fund 

PMA Power Marketing Administration 

Reclamation Bureau of Reclamation 

SEPA Southeastern Power Administration 

WRDA Water Resources Development Act of 1986

This is a work of the U.S. government and is not subject to copyright protection in the 

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without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-16-106 Army Corps of Engineers

441 G St. N.W.

Washington, DC 20548

December 10, 2015

The Honorable Barbara Boxer

Ranking Member

Committee on Environment & Public Works 

United States Senate

The Honorable Bill Shuster

Chairman

The Honorable Peter DeFazio

Ranking Member

Committee on Transportation and Infrastructure

House of Representatives

The Honorable David Vitter

United States Senate

The U.S. Army Corps of Engineers (Corps) operates 709 dams1 that 

provide numerous benefits for a wide range of customers, including 

protecting communities from floods, generating hydropower, and 

supplying water from reservoirs. While the Corps’ dams comprise a small 

portion of the country’s more than 87,000 dams,2 they are a part of the 

aging national infrastructure.3 For example, the American Society of Civil 

Engineers estimates that by 2020, 70 percent of all dams in the United 

 1

A dam is an artificial barrier constructed for the purpose of storage, control, or diversion 

of water. The Corps defines dams as being (1) 25 feet or more in height or (2) having an 

impounding capacity at maximum water storage elevation of 50 acre-feet or more.

2

The Corps maintains and publishes the National Inventory of Dams, which contains 

information about dams in the United States and its territories. 

3

According to the American Society of Civil Engineers, in 2013, the majority of dams, 69 

percent, were owned by a private entity. Federal, state, and local governments owned and 

operated the remaining dams. According to Corps’ data, Corps dams represent about 50 

percent of all federally-owned dams.

Letter
Page 2 GAO-16-106 Army Corps of Engineers

States will be over 50 years old.4 Currently, the average age of the Corps’ 

709 dams is 56 years.5

The age and criticality of dam infrastructure requires the Corps to conduct 

regular maintenance and, in some cases, major repairs to assure 

continued safe operation. The Corps currently estimates the cost of fixing 

all of its dams that need repair at $24 billion. Since 2005, when the Corps 

adopted its current risk-informed approach to dam safety, it has initiated 

repairs of 16 dams in urgent need of repair, the costs for which range 

from tens to hundreds of millions of dollars per dam, with total repair costs 

estimated at about $5.8 billion. At some dams, sponsors or organizations, 

such as water utilities or hydropower users, that benefit from dam 

operations share in the cost of the repairs. In this context, you asked us to 

review issues concerning cost sharing for dam safety repairs. This report 

examines how, over the last 10 years, the Corps (1) determined cost 

sharing for dam safety repairs and (2) communicated with sponsors 

regarding cost sharing for dam safety repairs.

To address these objectives, we reviewed relevant federal laws and 

Corps engineering regulations related to dam safety and cost sharing. For 

each of the 16 dam safety repair projects funded for design or 

construction from fiscal year 20076 to fiscal year 2016, we analyzed 

Corps dam safety documents and compared them against the Corps’ 

latest Safety of Dams regulation.7,8 We interviewed Department of 

Defense and Corps headquarters officials about how the Corps 

determined and communicated with sponsors about cost sharing for dam 

 4

American Society of Civil Engineers. 2013 Report Card for America’s Infrastructure

(March 2013).

5

According to Corps data, most Corps dams were built during the 1960s and 1970s, with 

75 percent of dams serving multiple purposes related to flood control, irrigation, 

navigation, water supply, hydropower generation, and recreation. More than half of the 

Corps’ dams are located on or east of the Mississippi River. 

6

Fiscal year 2007 was the first fiscal year that reflected the Corps’ current risk-informed 

dam safety approach initiated in 2005. The Corps’ risk-informed approach is described in 

more detail later in the report.

7

We did not evaluate the accuracy or legal sufficiency of the Corps’ application of costsharing formulas and calculations.

8

U.S. Army Corps of Engineers, Safety of Dams—Policy and Procedures, Regulation No. 

1110-2-1156 (Mar. 31, 2014).
Page 3 GAO-16-106 Army Corps of Engineers

safety repairs. In particular, we interviewed officials about the Corps’ 

process for dam safety repairs, key decision points for determining cost 

sharing, communication with sponsors, and tracking of cost share 

payments. We interviewed Corps officials at the 11 district offices where 

the 16 dams are located about their decisions associated with cost 

sharing and about their communication with sponsors. We also 

interviewed the federal, state, local, and private sponsors identified by the 

Corps about their cost sharing in these dam safety repair projects (see 

app. I for the list of sponsors we interviewed). We asked the sponsors 

about the terms of their agreements with the Corps, their history of being 

a sponsor, the financial impacts of cost sharing for dam safety repair 

projects, and the Corps’ communication with them regarding the projects 

and cost sharing. We compared communications between sponsors and 

the Corps against requirements for such communications described in the 

Corps’ latest Safety of Dams regulation. Additionally, we conducted site 

visits to a non-generalizable sample of 3 dams in the Corps’ Nashville, 

TN, and Tulsa, OK, districts based on the Corps’ cost sharing 

determinations and the range of project sponsors (e.g., hydropower, 

water supply). At these sites we observed dam safety repair projects and 

interviewed Corps officials and sponsors.

We conducted this performance audit from November 2014 to December 

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

The Corps is the world’s largest public engineering, design, and 

construction management agency, responsible for water resources 

infrastructure such as dams, levees, hurricane barriers, and floodgates in 

every state.9 Through its Civil Works program, the Corps plans, designs, 

and operates water resources infrastructure projects. The Civil Works 

program is organized into 3 tiers: a national headquarters in Washington, 

 9

Located within the Department of Defense, the Corps has both military and civilian 

responsibilities. The Corps’ Military program provides, among other things, engineering 

and construction services to other U.S. government agencies and foreign governments. 

This report discusses the Civil Works program. 

Background
Page 4 GAO-16-106 Army Corps of Engineers

D.C.; 8 regional divisions that were established generally according to 

watershed boundaries; and 38 districts nationwide. In addition, the Corps 

maintains national and regional centers that provide technical services to 

Corps divisions and districts, such as support of dam safety repair 

projects. 

The Assistant Secretary of the Army for Civil Works (ASA(CW)), 

appointed by the President, establishes the strategic direction, develops 

policy, and supervises the execution of the Civil Works program. The 

Corps headquarters and regional division offices primarily implement 

policies and provide oversight to district offices. The Corps headquarters’ 

Dam Safety Officer (DSO), a civilian official, is responsible for all dam 

safety activities, including establishing policy and technical criteria for 

dam safety and prioritizing dam-safety-related work. The eight divisions, 

commanded by military officers, coordinate civil works projects in the 

districts within the eight respective geographic areas. The Corps districts, 

commanded by military officers, are responsible for planning, 

engineering, constructing, and managing water resources infrastructure 

projects in their districts as well as coordinating with the Corps’ sponsors. 

Most of the Corps’ dams are one of two types: earthen or concrete.10

According to Corps data, about 68 percent of Corps dams have earthen 

embankments, constructed of various types of materials such as clay, silt, 

sand, or gravel. Another 30 percent of Corps dams are concrete dams.11

Dams can have various features, such as spillway gates and conduit 

outlets, to control water releases, as well as auxiliary spillways to divert 

water flows in the event of expected maximum flood conditions. (See fig.

1.) 

 10Some of the Corps’ dams are combination earthen and concrete dams. The Corps 

categorizes dams by their primary type. 

11The remaining 2 percent of the Corps’ dams are other types.
Page 5 GAO-16-106 Army Corps of Engineers

Figure 1: Illustration of Dam Types and Features

To ensure continued safe operation, Corps dams undergo routine 

maintenance, such as cleaning of drains and mowing of embankments, 

but in some cases require major repairs, which, as defined by the Corps, 

are those that cost over $16 million. These repairs may be to:

• rehabilitate spillway gate equipment to safely pass excess water, 

The Corps’ Dam Safety 

Repair Process
Page 6 GAO-16-106 Army Corps of Engineers

• fill voids in embankments or foundations with grout,12

• build cutoff walls to prevent erosion to embankments or foundations 

from seepage,13

• build shear walls to increase dam stability,14

• increase dam’s height to prevent overtopping, or 

• anchor a dam to its foundation.15

Since 2005, the Corps has used a risk-informed approach to select dams 

for safety-related repairs. While integrating traditional engineering 

analyses and standards, the risk-informed approach aims to identify and 

prioritize the most critical dam safety risks rather than eliminate all 

potential risks. To that end, the Corps has developed the Dam Safety 

Action Classification (DSAC) system, based on a 5-point scale, to help 

guide key decisions for dam safety repairs. This risk classification system 

reflects the probability of a dam’s failure and resulting potential 

consequences due to failure.16 As of July 2015, the Corps has placed 309 

dams (about 44 percent) in actionable categories (DSAC 1, 2, and 3) 

because the dams were determined to be at moderate to very high risk of 

failure. In particular, the Corps has classified 17 dams as DSAC 1 (very 

high urgency), 76 dams as DSAC 2 (high urgency), and 216 dams as 

DSAC 3 (moderate urgency).17 From fiscal year 2007 to fiscal year 2016, 

the Corps selected 16 of these DSAC 1 and 2 dams for repairs.

 12Grout is a fluidized material injected into soil, rock, concrete, or other construction 

material to seal openings and to lower the permeability and/or provide additional structural 

strength.

13A cutoff wall is a wall of impervious material, usually of concrete, asphaltic concrete, or 

steel sheet piling constructed in the foundation and abutments to reduce seepage beneath 

and adjacent to the dam.

14A shear wall is a structural element used to resist lateral forces parallel to the plane of 

the wall. Normally, a series of walls are built at set intervals along the downstream 

foundation of a dam to resist movement, or separation, of a dam from its foundation.

15Multi-strand cables connecting the dam to its foundation can be installed and placed in 

tension to anchor the dam and prevent its displacement.

16Dam failure is characterized by the sudden, rapid, and uncontrolled release of 

impounded water. Possible consequences of dam failure include loss of life and property.

17The Corps has categorized 398 dams as DSAC 4 (low urgency) and none as DSAC 5 

(normal urgency). As of July 2015, two Corps dams were not classified: one newly 

constructed and one newly added to the inventory.
Page 7 GAO-16-106 Army Corps of Engineers

According to the Corps’ Safety of Dams regulation,18 once a dam has 

been selected as needing repair according to its DSAC designation, the 

Corps is to take the following steps to study, design, and construct a dam 

safety repair project.19 

• Study: Corps district officials are to conduct a dam safety modification 

study to determine a long-term solution. This study is to involve risk 

analyses, determination of potential failure modes, evaluation of 

alternatives to address potential failures, and development of a 

recommended technical solution with its estimated cost.20 The study 

also is to identify cost share sponsors and to recommend an 

applicable authority for cost sharing purposes (discussed later in this 

report) under which to implement the repair work. The results of the 

study are published in a dam safety modification report, which is 

forwarded to division and headquarters officials, including the DSO, 

for review and approval of recommended repairs. The Corps districts 

are to communicate to sponsors and the public about dam failure risks 

and potential repairs during the study phase. Once approved by 

Corps’ DSO and ASA(CW), the cost estimate in the dam safety 

modification report is used as a basis to request funds from Congress 

for design and construction. 

• Design: Project design takes place at the Corps districts and dam 

safety production centers,21 involving investigation of site conditions, 

such as testing soils, engineering analysis, and development of 

design plans and specifications. In addition, further risk analyses are 

to be conducted as well as expert reviews of the design. During the 

project’s design, the Corps districts are also to communicate to 

sponsors and the public about their plans for conducting repairs. 

 18U.S. Army Corps of Engineers, Safety of Dams—Policy and Procedures, Regulation No. 

1110-2-1156 (Mar. 31, 2014). 

19Some dam safety repair projects in our review did not fully follow the risk-informed 

process because they were initiated prior to the process being instituted.

20A recommended solution may not require a repair. To reduce the risk of dam failure, the 

Corps may, for example, lower the reservoir impounded by the dam.

21Regional Dam Safety Production Centers assign a lead engineer to support technical 

development of a project. In addition, the Dam Safety Modification Mandatory Center of 

Expertise—a national center of expertise—provides technical support to the project.
Page 8 GAO-16-106 Army Corps of Engineers

• Construction: Project construction, managed by district officials, is 

typically carried out through contracts with private companies. 

Construction for dam safety repairs can take multiple years and 

involve several contracts. To assure construction quality, the Corps 

districts are required to conduct regular inspections. In addition, Corps 

officials are to continue their outreach and communications with 

sponsors and the public throughout the construction period. 

Sponsors share in the costs of dam safety repairs based on original 

congressional authorizations for dam construction or subsequent 

sponsors’ agreements with the Corps. A wide array of entities can be cost 

sharing sponsors, including federal, state, and local agencies as well as 

private entities. Sponsors may be identified at the time of original dam 

construction or at a later time. Congressional authorizations or sponsors’ 

agreements with the Corps delineate the benefits sponsors receive as 

well as their responsibilities and cost sharing obligations. Cost sharing 

terms are unique to each sponsor at each dam. Commensurate with 

benefits derived from use of a dam, sponsors typically pay a percentage 

of a dam’s annual operations and maintenance costs, as well as the 

same percentage of total costs of major dam safety repairs. Cost sharing 

percentages can range from under 1 percent, such as for small water 

supply users, to over 50 percent, such as for hydropower users, 

depending on a sponsor’s agreement with the Corps. 

Sponsors’ payment mechanisms for dam safety repairs vary. When the 

Corps determines a need for dam safety repairs, it typically budgets for 

and funds the entire amount of the repair upfront. Sponsors, responsible 

for sharing in the design and construction costs for dam safety repair 

projects, pay their cost shares in different ways as described below and in 

table 1. However, not all Corps dams have cost sharing sponsors. The 

federal government fully funds the repairs of those Corps dams that do 

not have sponsors.22

• Non-federal sponsors, depending on their agreement with the Corps, 

are to pay their cost share either on a “pay-as-you-go” basis or at the 

end of the project. Sponsors that are identified at the time of initial 

dam construction typically pay their cost share on a pay-as-you-go 

 22According to the Corps, non-federal interests that are not project sponsors may provide 

contributions such as granting rights-of-way or easements in support of repair projects.

Cost Sharing Sponsors
Page 9 GAO-16-106 Army Corps of Engineers

basis. In these situations, sponsors contribute their cost share while 

project design and construction are ongoing. Sponsors—typically 

water utilities—that enter into agreements with the Corps subsequent 

to the dam’s initial construction have the option to pay as you go or in 

lump sum, with interest, at the end of the dam safety repair project, 

once all costs are finalized and calculated. According to Corps 

officials, non-federal sponsors may seek an exception to amortize 

their cost share payments over time following project completion. The 

Corps collects and tracks payments submitted by non-federal 

sponsors and transmits them to the U.S. Treasury. 

• Federal sponsors of Corps dams are the U.S. Department of Energy’s 

four Power Marketing Administrations (PMA).23 PMAs sell the 

electrical output of federally owned and operated hydroelectric 

dams.24 PMAs market wholesale power by entering into contracts with 

customers, with preference given to not-for-profit public-owned 

utilities, to sell power at set rates.25 Through their rates, PMAs recover 

all costs associated with power production and transmission, including 

their cost share for dam safety repairs, which they remit directly to the 

U.S. Treasury. PMAs are to recover all associated power production 

costs within a reasonable period of time, which the Department of 

Energy has traditionally considered to be 50 years or less.

 23The four PMAs are: The Bonneville Power Administration (BPA), the Western Area 

Power Administration (WAPA), the Southeastern Power Administration (SEPA), and the 

Southwestern Power Administration (SWPA). 

24Under federal statute, power generated at Corps dams beyond what is needed for dam 

operations is to be delivered to the Secretary of Energy who is to transmit and dispose of 

such power in a manner as to encourage the most widespread use at the lowest possible 

rates to consumers consistent with sound business principles (16 U.S.C. § 825s).

25To set rates, PMA Administrators propose draft rates, which are approved on an interim 

basis by the Deputy Secretary of Energy, and notify the public of proposed 5-year rates 

through Federal Register Notices. Rate schedules become effective upon confirmation 

and approval by the Secretary of Energy.
Page 10 GAO-16-106 Army Corps of Engineers

Table 1: Cost Sharing Payment Mechanisms and Recipients for Federal and Non-Federal Sponsors of the U.S. Army Corps of 

Engineers’ Dam Safety Repair Projects

Non-federal sponsors Federal sponsors

Original agreement

(at time of dam construction)

Subsequent agreement

(after dam construction)a Power Marketing Administrations

Payment mechanism Pay as you go Pay as you go 

Lump sum upon project 

completion

At project completion; payment 

can be over a period of up to 50 

years

Payment recipient U.S. Treasury through Corps U.S. Treasury through Corps U.S. Treasury directly

Source: GAO analysis of U.S. Army Corps of Engineers’ documentation. | GAO-16-106

a

In general, section 1203 of the Water Resources Development Act of 1986 provides that payment of 

costs may be made over a period of up to 30 years from the date of a project’s completion, with 

interest, for projects covered by section 1203. According to Corps officials, under Corps policy, while 

such an amortized payment is available to sponsors that do not have an existing agreement with the 

Corps, sponsors that do have an existing agreement with the Corps are required to pay using pay as 

you go or lump sum upon project completion options. Corps officials further provided that they allow 

for sponsors to seek an exception to this policy. 

According to the Corps’ Safety of Dams regulation,26 during a dam safety 

modification study, Corps district officials are to identify and analyze all 

the potential ways that a dam could fail. Such potential failure modes can 

include: (1) embankment or foundation erosion through seepage; (2) 

 26U.S. Army Corps of Engineers, Safety of Dams—Policy and Procedures, Regulation No. 

1110-2-1156 (Mar. 31, 2014).

The Corps Has 

Determined Cost 

Sharing Based on 

Ways in Which a Dam 

May Fail, but Has Not 

Applied One 

Provision That 

Reduces Sponsors’ 

Cost Share

A Dam’s Potential Failure 

Mode Drives the Corps’ 

Decision on Cost Sharing
Page 11 GAO-16-106 Army Corps of Engineers

inability of a dam to safely pass excess water during expected maximum 

flood conditions (hydrologic failure mode); or (3) inability of a dam to 

withstand the expected maximum earthquake (seismic failure mode). 

Once potential failure modes, among other things, are determined, Corps 

district officials are to generate a dam safety modification report that 

reviews alternatives and recommends a technical solution to address the 

potential failure modes. 

For cost sharing purposes, the regulation requires the district to 

recommend in the report one of the two types of cost sharing 

arrangements or authorities: Major Rehabilitation authority or Dam Safety 

Assurance authority. The potential failure mode is the primary factor in 

determining the applicable authority, in addition to consideration of policy 

and statutory requirements:

Major Rehabilitation: According to Corps officials, this authority applies to 

dam safety repairs associated with typical degradation of dams over time. 

Under this authority, sponsors are to pay their full cost share. For 

example, if a sponsor’s agreed cost share is 10 percent, then the sponsor 

is responsible for 10 percent of the total cost of the dam safety repair 

project. (See table 2.) The Corps’ regulation requires application of Major 

Rehabilitation authority if embankment or foundation erosion through 

seepage or instability is determined to be the potential failure mode.

Dam Safety Assurance: In certain situations, however, the Corps can 

apply its Dam Safety Assurance authority, which significantly reduces 

sponsors’ cost shares. This authority, based on Section 1203 of the 

Water Resources Development Act (WRDA) of 1986, applies to safetyrelated dam modifications needed as a result of new hydrologic or 

seismic data or changes in state-of-the-art design or construction criteria 

deemed necessary for safety purposes (state-of-the-art provision).27 This 

authority reflects, in part, the availability of new information—such as 

current hydrologic models or seismic studies—that could indicate a dam’s 

increased vulnerability and greater risk of failure. Application of this 

authority reduces a sponsor’s responsibility to 15 percent of its agreed 

cost share, effectively reducing a sponsor’s cost share obligation by 85 

percent. For example, if a sponsor’s agreed cost share is 10 percent, then 

the sponsor is responsible for 15 percent of this amount, meaning that it 

 27Pub. L. No. 99-662, §1203, 100 Stat. 4082, 4263 (1986) (codified at 33 U.S.C. § 467n).
Page 12 GAO-16-106 Army Corps of Engineers

would be responsible for 1.5 percent of the total cost of a dam safety 

repair project. (See table 2.) 

Table 2: Hypothetical Cost Sharing Example of a $50-Million Dam Safety Repair 

Project with 10 Percent Sponsor Cost Share 

Sponsor’s cost share

Major 

Rehabilitation

Dam Safety 

Assurance

Cost sharing responsibility based on 

agreement

Full (100 percent) Reduced (15 percent)

Percent of total project cost 10 1.5

Amount of cost share $5 million $750,000

Source: GAO analysis | GAO-16-106

The final determination of cost sharing authority is reviewed through the 

Corps’ chain of command. The Corps’ DSO is to review and approve the 

dam safety modification report and determination of funding authority. 

Subsequently, the ASA(CW) office is to review the DSO decision and 

determine if it concurs.28 Sponsors have no formal role in the Corps’ 

authority determination. According to Corps officials, while the sponsors 

are typically involved in cost sharing discussions, funding authority 

determination is a federal responsibility and not subject to appeals from 

sponsors. 

The Corps applied either its Major Rehabilitation or Dam Safety 

Assurance authority to the 16 dams selected for dam safety repairs from 

fiscal year 2007 to fiscal year 2016, selecting the funding authority to 

address each dam’s determined potential failure mode consistent with its 

regulation. (See app. II.) The total estimated cost for these repairs is $5.8 

billion.

• For 11 of the 16 dams the Corps applied its Major Rehabilitation 

authority. At 9 of these 11 dams, the potential failure mode was 

determined to be embankment or foundation erosion through 

seepage, and the Corps implemented dam safety repair projects 

 28While authority determination is a Corps responsibility, on two occasions Congress has 

specifically authorized or directed the Corps to apply its Dam Safety Assurance authority. 

These involved projects at Fern Ridge dam, OR (Pub. L. No. 110-114, § 5120, 121 Stat. 

1041, 1240 (2007)) and Beaver Lake dam, AR (Pub. L. No. 102-377, 106 Stat. 1315, 1318 

(1992), Pub. L. No. 102-580, § 209(f), 106 Stat. 4797, 4830 (1992)).

The Corps Consistently 

Determined Cost Sharing 

Based on Potential Failure 

Mode
Page 13 GAO-16-106 Army Corps of Engineers

under its Major Rehabilitation authority consistent with its regulation.29

Sponsors for these dams are to pay their full cost share, estimated at 

$574 million of the total $4.2 billion in repairs.30

• For the 5 remaining dams, the Corps applied its Dam Safety 

Assurance authority because repairs were determined to be the result 

of new hydrologic or seismic data indicating the potential inability of 

these dams to safely pass excess water during expected maximum 

flood conditions or to withstand the expected maximum earthquake. 

The sponsors for these dams are to pay 15 percent of their cost 

share—which cumulatively total an estimated $31 million of the total 

$1.6 billion in repairs for these dams.31

While the Corps applied the Dam Safety Assurance authority to 5 of 16 

dams in our review based on the availability of new hydrologic or seismic 

data, it did not apply the Dam Safety Assurance authority’s state-of-theart provision to any of these dam safety repair projects. According to 

ASA(CW) officials, the Corps has not applied the state-of-the-art provision 

since enactment of the enabling legislation (WRDA of 1986). 

When asked why the Corps had not applied this provision, ASA(CW) 

officials said that they would consider applying the state-of-the-art 

provision on a case-by-case basis, but they have never been presented 

with a case that they determined to have merited it. Additionally, 

ASA(CW) officials were unable to define the conditions under which the 

provision could apply or to provide a hypothetical example of a dam 

safety issue that would lead them to use it.

The circumstances under which the state-of-the-art provision might apply 

have not been identified in the Corps regulations, and the Corps has not 

had a consistent policy position regarding when the state-of-the-art 

provision might apply. The Corps’ 1997 regulation states that dam safety 

repairs required due to state-of-the-art changes would be decided on a 

case-by-case basis, but does not identify criteria for how the cases would 

 29The potential failure modes of the remaining two dams were gate failure and erosion 

along a conduit pipe. 

30Seven of the 11 dams have sponsors. The remaining 4 dams are 100 percent federally 

funded. 

31Four of the 5 dams have sponsors. The remaining dam is 100 percent federally funded. 

The Corps Did Not Apply 

One Provision of Its Dam 

Safety Assurance 

Authority That Reduces 

Sponsors’ Cost Share
Page 14 GAO-16-106 Army Corps of Engineers

be selected. However, in 2011, and again in the 2014 update, the Corps’ 

Safety of Dams regulation discusses application of Dam Safety 

Assurance authority only with regard to new hydrologic or seismic data, 

stating that the state-of-the-art provision would not be applied. 

Specifically, the 2014 regulation notes the difficulty of defining the stateof-the-art provision and states that because the state-of-the-art 

“terminology makes it difficult to define the kinds of repairs that would be 

applicable, [...] it is not used.”32 The same 2014 regulation states that use 

of the state-of-the-art provision must be decided on a case-by-case basis 

by the ASA(CW). 

Internal control standards state that information and effective 

communication are needed for an agency to achieve all of its objectives.33

Moreover, internal controls guidance states that effective communication 

may be achieved through clear policy. However, the Corps’ current 

regulation is not clear as to what is meant by “state-of-the-art design or 

construction criteria deemed necessary for safety purposes” in the 

statutory provision. Thus, this lack of clarity coupled with the Corps’ 

inconsistent policy position has hindered the Corps from applying the 

state-of-the-art provision in a manner consistent with other Dam Safety 

Assurance provisions. Without clarifying the circumstances under which 

the state-of-the-art provision applies and implementing the policy 

consistently, the Corps is at risk of not applying the full range of statutory 

authorities provided to it, thereby raising questions about the appropriate 

allocation of federal and non-federal funding for dam safety repairs. As 

discussed later in this report, the Corps’ inaction in setting a clear policy 

for a provision under which sponsors face significant financial impacts 

has contributed to conditions under which sponsors have asserted their 

own terms for use of the provision or are considering taking legal action 

against the Corps.

In contrast, another federal agency has applied a similar state-of-the-art 

provision to its dam safety repairs.34 The U.S. Department of the Interior’s 

 32U.S. Army Corps of Engineers, Safety of Dams—Policy and Procedures, Regulation No. 

1110-2-1156 (Mar. 31, 2014).

33GAO, Standards for Internal Control in the Federal Government, AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

34We did not evaluate the effectiveness of this agency’s dam safety repair efforts or the 

extent to which it consistently applied the applicable state-of-the-art provision as part of 

this review.
Page 15 GAO-16-106 Army Corps of Engineers

Bureau of Reclamation (Reclamation) has a similar statutory authority 

enacted by the Reclamation Safety of Dams Act of 1978, which requires 

sponsors’ cost share at 15 percent when modifications result from new 

hydrologic or seismic data, or changes in state-of-the-art design or 

construction criteria deemed necessary for safety purposes.35 According 

to Reclamation officials, while Reclamation has not developed a definition 

for the state-of-the-art design or construction criteria, it has 

operationalized and applied the state-of-the-art provision exclusively to 

modify 30 dams since 1978, primarily in situations where defensive dam 

safety measures, such as filters and drainage mechanisms, were lacking 

or were not consistent with the current state of the practice.36

 3543 U.S.C. § 508(b) enacted by Pub. L. No. 95-578, § 4(b), 92 Stat. 2471 (1978).

36As of July 2015, Reclamation solely applied the state-of-the-art provision to safety 

repairs at 30 dams. It applied the state-of-the-art provision in combination with a 

hydrologic and/or seismic provision at an additional 21 dams.

Some Corps Districts 

Did Not Communicate 

with Sponsors or 

Engage Them 

Effectively, Potentially 

Reducing Payments 

Received from 

Sponsors
Page 16 GAO-16-106 Army Corps of Engineers

The Corps’ lack of clarity and a consistent policy position regarding the 

state-of-the-art provision under the Dam Safety Assurance authority has 

contributed to disagreements with a major sponsor and uncertainty 

regarding sponsor payment. In this case, Southeastern Power 

Administration (SEPA),37 the federal PMA sponsor for Center Hill 

(Tennessee) and Wolf Creek (Kentucky) dams, has disagreed with the 

Corps’ decision to repair the dams under its Major Rehabilitation authority

rather than the state-of-the-art provision of the Dam Safety Assurance 

authority. (See fig. 2.) SEPA has asserted that the Dam Safety Assurance 

authority should apply to these projects.38 SEPA has taken this position, 

in part, because while dam safety repairs at Wolf Creek were originally 

determined to be under the Major Rehabilitation authority,39 Corps district 

officials had subsequently recommended using the Dam Safety 

Assurance authority based on application of the state-of-the-art 

provision.40 SEPA was aware of the district’s recommendation to change 

the authority determination to Dam Safety Assurance. However, the 

ASA(CW) ultimately did not support this recommendation noting that 

erosion caused by seepage—the potential failure mode identified at these 

dams—has consistently and categorically been addressed through 

application of the Major Rehabilitation authority. According to SEPA 

officials, the conflicting actions of Corps district and headquarters officials 

 37SEPA markets hydropower generated by Corps dams to not-for-profit public-owned 

utilities in the states of Georgia, Florida, Alabama, Mississippi, Illinois, Virginia, 

Tennessee, Kentucky, North Carolina, and South Carolina.

38See SEPA’s notice of proposed rates at 80 Fed. Reg. 30451 (May 28, 2015). In 

addition, on October 2, 2015, SEPA issued a notice of interim approval of rates based 

upon the application of section 1203 of the Water Resources Development Act of 1986 

(80 Fed. Reg. 59742 (Oct. 2, 2015)). In the notice of interim approval of rates, SEPA 

notes, however, that as it continues to finalize its rate calculation, it also continues to 

discuss, analyze, and seek guidance from other relevant agencies. SEPA further provides 

that interagency discussions on funding authority remain ongoing and that a 

reconsideration of such interim rates could occur if, as a result of those discussions, other 

relevant federal agencies provide a factual and legal basis for a contrary determination 

regarding the applicability of section 1203 of the Water Resources Development Act of 

1986.

39See U.S. Army Corps of Engineers, Wolf Creek Dam, Jamestown, Kentucky: Seepage 

Control Major Rehabilitation Evaluation Final Report (July 11, 2005).

40Wolf Creek dam was the first of the two dams to undergo dam safety repairs. Both 

Center Hill and Wolf Creek dams are located in the Cumberland River basin and, 

according to Corps documents, have the same underlying geology and dam safety 

concerns. SEPA has argued that Dam Safety Assurance authority similarly applies to 

repairs at both dams. 

The Corps Did Not 

Effectively Communicate 

Its Cost Sharing

Determination, 

Contributing to Uncertainty 

Regarding Sponsor 

Payment
Page 17 GAO-16-106 Army Corps of Engineers

on authority determination created uncertainty for SEPA regarding the 

Corps’ position.

Figure 2: Center Hill, TN, (left) and Wolf Creek, KY, Dams

SEPA stated that the need for repairs to Center Hill and Wolf Creek dams 

is based on state-of-the-art design and construction practices and notes 

that the Corps consulted with recognized international experts to design 

the cutoff walls being built at these dams to address the effects of 

seepage. According to SEPA officials, current repairs based on state-ofthe-art practices are being made at these two dams, in part, because 

previous repair efforts did not adequately address site conditions 

contributing to seepage.41 Conversely, Corps officials told us that 

seepage naturally occurs at all dams and periodically needs to be 

addressed, such as through implementation of repair projects. Moreover, 

according to Corps officials, the “karst” limestone upon which the Center 

Hill and Wolf Creek dams are built is prone to increasing seepage over 

time because of the dissolution of soluble rock foundation. Concrete cutoff walls put in place at Center Hill and Wolf Creek dams under current 

projects were designed to consider these effects and, according to Corps 

officials, constructed as permanent seepage control measures. 

 41SEPA officials cited the Corps’ July 2005 report (see footnote 39) as the basis for their 

comments. According to this report, original design and construction techniques of the 

1930s and 1940s used at Wolf Creek were inadequate to control seepage in the “karst”

geology beneath the dam. In addition, according to this report, installation of a grout 

curtain and cutoff wall from 1968 to 1979 failed to adequately limit seepage. 
Page 18 GAO-16-106 Army Corps of Engineers

Because of the high cost of repairs to these two dams—estimated at 

about $958 million, for which SEPA’s share under its original 

congressional authorization is about 50 percent—SEPA officials have 

expressed concern about the agency’s ability to recover costs if the 

projects are considered under the Major Rehabilitation authority. Under 

this authority, SEPA’s cost to recover for both dams is estimated at about 

$482 million. Officials said that if SEPA were obligated to recover this 

amount, its hydropower rates could become prohibitively expensive. As a 

result, according to these officials, SEPA’s customers might terminate 

their contracts and acquire energy via more economical options, such as 

energy derived from natural gas or coal. If the Corps were to apply its 

Dam Safety Assurance authority to these repairs under, for example, the 

state-of-the-art provision, SEPA’s cost to recover would be reduced to 

about $72 million (85 percent reduction). 

The outcome related to the disagreement between the Corps and SEPA 

has significant implications given that mitigating the effects of seepage, 

as evidenced by our review, is a common reason for making safetyrelated repairs. In recent rate-making notices, SEPA has based its 

proposed rates on the Dam Safety Assurance authority for dam safety 

repairs at Center Hill and Wolf Creek dams. This action signals SEPA’s 

position that it should pay the reduced cost share (about $72 million) 

provided under this authority, and without resolution, recovering federal 

outlays for funding the majority of project costs (about $410 million) 

remains uncertain. In moving forward to resolve this disagreement, it is 

important that potential impacts on aging dam infrastructure, hydropower 

rates, and the federal budget are considered in a coordinated, strategic 

approach.

SEPA’s rate actions could set precedent and create uncertainty for the 

federal government if sponsors at other dams also assert that the stateof-the-art provision applies to projects that mitigate the effects of 

seepage. For example, the Corps determined that repairs to mitigate the 

effects of seepage were needed at 9 of the 16 dams we reviewed, with a 

total estimated cost of about $4 billion. If other sponsors at these dams 

were to follow SEPA’s example, the federal government could potentially 

receive reduced cost share payments from these sponsors. Further, in 

light of its aging infrastructure, more Corps dams could require seepagerelated repairs in the future. A policy that clarifies the Corps’ application of 

the state-of-the-art provision could help to minimize potential 

disagreements with sponsors and lead to greater certainty concerning the 

federal government’s and project sponsors’ cost sharing obligations. 
Page 19 GAO-16-106 Army Corps of Engineers

The Corps’ Safety of Dams regulation requires Corps districts to engage 

sponsors by notifying them during the study phase about the dam safety 

repair project and their estimated financial responsibility. The regulation 

further states: "Requirements for cost sharing and the identification of 

non-Federal sponsors (or partners) must occur very early in the study 

process to ensure that the non-Federal interests are willing cost share 

partners. Uncertainty about sponsorship and the lack of meaningful 

sponsor involvement in the scope and extent of dam safety repairs can 

cause delays to the dam safety modification work." As mentioned 

previously, under the Corps’ regulations, Corps district officials are also 

expected to communicate with sponsors throughout project design and 

construction as well as officially notify sponsors of their final cost share

payment upon the project’s completion. Additionally, internal control 

standards state that managers should effectively communicate with 

external stakeholders that may have a significant impact on the agency 

achieving its goals.42 

While the Corps Safety of Dams regulation identifies when 

communication with sponsors is to occur, it does not provide clear 

guidance on how to effectively communicate with sponsors to establish 

and implement cost sharing agreements. Based on our discussions with 

state, local, and private sponsors of the dams we reviewed, we found that 

the Corps has generally established good relationships with these nonfederal sponsors and communicated project status information; however, 

some Corps districts were not timely or effective in communicating and 

reaching agreement on cost sharing responsibilities. Of the 16 dam safety 

repair projects we reviewed, 9 had sponsors,43 and—as discussed 

below—at 3 of the 9 dams the Corps did not communicate with the 

sponsors in a manner that would ensure their meaningful involvement 

and willingness to be cost sharing partners, as required by its regulation. 

According to the agreements, these sponsors are to pay their cost share 

to the Corps, which remits these funds to the U.S. Treasury. However, at 

least three sponsors have expressed concerns and indicated resistance 

about paying their determined cost shares, estimated to be about $3.1 

 42 GAO/AIMD-00-21.3.1

43While 11 of the 16 dams in our review had sponsors, only 9 dams had sponsors that 

were organizations. The Inland Waterways Trust Fund, the sponsor for 2 remaining dams, 

is a funding source financed through a fuel tax for construction and rehabilitation of locks 

and dams on the Inland Waterways System.

The Corps Has Not 

Engaged Some Sponsors 

Effectively, Potentially 

Reducing Sponsors’ 

Payment to the Federal 

Government
Page 20 GAO-16-106 Army Corps of Engineers

million. Because the Corps does not have clear guidance to ensure 

effective communications with sponsors, it did not adequately 

communicate or reach agreements on cost sharing responsibilities with 

these sponsors. As a result, these sponsors’ plans for paying their cost 

shares are uncertain, leaving the recovery of federal outlays from these 

sponsors similarly uncertain. 

• Tuttle Creek Dam: At Tuttle Creek dam (Kansas), the Corps identified 

and contacted one water supply sponsor during the study phase 

(2000–2002) of a dam stabilization project as well as notified the 

sponsor of its estimated cost share, but otherwise did not effectively 

engage the sponsor throughout the project to ensure the sponsor’s 

cost share payment. In a 2002 letter to the Corps, the sponsor 

asserted its position that it should not be required to pay for repairs to 

stabilize the dam, a repair that would enable the dam to withstand the 

expected maximum earthquake. In the sponsor’s opinion, the sponsor 

was not responsible for sharing costs related to changes in the Corps’ 

design standards or to address what the sponsor felt were design 

flaws. In 2003, the Corps responded to the sponsor reiterating the 

sponsor’s responsibility for sharing in the costs of the project. The 

Corps’ written response included its estimate of the sponsor’s cost 

share, approximately $770,000, and described payment options: payas-you-go or lump sum at the end of construction. According to the 

sponsor, it did not raise any further objections and, in a subsequent 

telephone conversation with Corps district officials, indicated its 

preference to use the pay-as-you-go option because it would be 

unable to afford a lump sum payment. Since 2003, the sponsor 

received briefings on the status of the project; however, the Corps did 

not follow up or otherwise engage the sponsor to pay incrementally 

while construction was ongoing. Construction was completed in 2010, 

but as of October 2015, the Corps had not requested payment or 

notified the sponsor of its final cost share. Corps officials told us that 

they are preparing a billing letter to send to the sponsor.

• Rough River Dam: At Rough River dam (Kentucky), the Corps’ 2012 

dam safety modification report stated that the project to grout and 

construct a 1,700-foot cutoff wall would be completed at full federal 

expense with no cost sharing sponsors. However, subsequent 

reviews by Corps headquarters identified water supply contract 

holders, and in 2013, the Corps notified three water supply sponsors 

of their cost sharing responsibilities for the dam safety repair. Due to 

uncertainty in identifying sponsors and delays in executing 

agreements with them, as discussed below, the Corps may 

experience challenges collecting these sponsors’ cost shares when 
Page 21 GAO-16-106 Army Corps of Engineers

the project is finally complete, estimated to be no later than 2021. 

Specifically:

• One sponsor has had a water use agreement with the Corps since 

1978, but has not been drawing water from the reservoir since 2007. 

In 2013, the Corps requested that the sponsor remove its water intake 

structure from the reservoir. However, in the same year, as mentioned 

previously, the Corps notified this sponsor of its cost sharing 

responsibilities for the dam safety repair project. In May 2015, the 

Corps signed a termination agreement with the sponsor under which 

the sponsor will not share the costs of the project. While the Corps is 

not expecting to collect a cost share, its interaction with the sponsor 

indicates a lack of effective communication.

• Although the Corps notified a second sponsor of its cost sharing 

responsibilities in 2013, this sponsor currently does not have a cost 

sharing responsibility for the dam safety repair project because the 

sponsor paid upfront for “major capital replacement” as part of its 

1966 agreement with the Corps.44 This provision of the agreement is 

to expire in April 2016, and according to Corps officials, a supplement 

to the agreement is being developed. The supplement would include 

this sponsor’s cost sharing responsibility in the current project. 

However, we were not able to reach this sponsor to confirm its 

intention to be a cost sharing sponsor, and it remains uncertain 

whether the Corps should expect a future agreement to cover current 

project costs. 

• The third sponsor has been drawing water from the reservoir since 

2002, when the sponsor negotiated terms of its water use with the 

Corps under a draft contract. Despite drawing up to 1.6 million gallons 

per day from the reservoir, the sponsor has not paid the Corps for 

water use and operations and maintenance expenses because a 

contract between the parties has not been executed. As a result, 

despite notifying the sponsor of its cost sharing responsibilities in the 

dam safety repair project in 2013, the Corps has no mechanism to 

compel payment from this sponsor. According to the sponsor, it has 

tried to finalize the 2002 contract numerous times, but the Corps did 

not finalize the agreement in any of these instances. In July 2015, a 

 44In its agreement with the Corps, the sponsor paid $56 upfront for “major capital 

replacement” required during the 50-year term of the agreement (i.e., until 2016).
Page 22 GAO-16-106 Army Corps of Engineers

Corps district official told us that Corps headquarters is reviewing the 

negotiated agreement; however, uncertainty about cost sharing exists 

until all parties execute a contract.

• Center Hill Dam: At Center Hill Dam (Tennessee), the Corps identified 

three water supply sponsors during the study phase but generally had 

minimal interactions with them to communicate cost sharing estimates 

and responsibilities. While two sponsors accept their cost sharing 

responsibilities and estimated cost sharing amounts, one sponsor 

disagrees with the Corps’ application of the Major Rehabilitation 

authority. Similar to the argument made by SEPA, which is also a 

sponsor at this dam, this water supply sponsor stated that the repairs 

being made to address the effects of seepage at the dam incorporate 

state-of-the-art design and construction practices and that the Corps 

should apply the state-of-the-art provision, thereby reducing this 

sponsor’s cost share. Under the Major Rehabilitation authority, this 

sponsor has a $1.9 million cost share. According to this sponsor, a 

municipal water utility, covering this cost would require raising water 

rates approximately 50 cents per household per month. The sponsor 

is contemplating a legal challenge if the Corps does not apply the 

state-of-the-art provision to lower this sponsor’s cost share according 

to a sponsor official. The Corps has maintained its position that 

application of its Major Rehabilitation authority is appropriate for this 

dam safety repair. 

Considering the significant cost of dam safety repair projects, and the 

number of dams that could need repairs in the future, implementing a 

dam safety program as effectively as possible is important. This 

implementation would include adequately defining conditions for key 

policy determinations to ensure the appropriate allocation of federal 

versus non-federal funds for dam safety repairs. 

However, the fact that the Corps has not developed policy guidance on 

the types of circumstances under which the state-of-the-art provision of its 

Dam Safety Assurance authority might apply, and has not had a 

consistent policy position, limits the Corps’ ability to ensure the effective 

implementation of the dam safety program. Without clarifying the 

circumstances under which the state-of-the-art provision applies and 

implementing the policy consistently, the Corps is at risk of not applying 

the full range of statutory authorities provided to it. Moreover, because of 

the financial implications of its authority determinations for sponsors, the 

Corps’ inaction in setting a clear policy for this provision contributes to 

Conclusions
Page 23 GAO-16-106 Army Corps of Engineers

conditions under which it is potentially exposed to adverse actions of 

these sponsors. 

The Corps’ engagement of project sponsors is critical to the successful 

implementation of dam safety repair projects not only to ensure the 

continued provision of benefits, such as water supply and hydropower 

generation, but also to recover federal outlays used to fund projects 

upfront. Because the Corps has not always effectively communicated with 

or engaged sponsors, some are deriving benefits from dams absent an 

agreement with the Corps while other sponsors that have agreements 

either have not been notified by the Corps of their final cost share 

responsibility or dispute the Corps’ cost sharing determination and may 

raise a legal challenge. While the Corps’ Safety of Dams regulation 

provides guidance to district offices for communicating with sponsors, 

greater clarity about effective communication requirements to establish 

and implement agreements with sponsors would help the Corps ensure 

equity in its treatment of sponsors and make certain that the federal 

government receives expected cost share payments. 

To improve cost sharing for dam safety repairs, we recommend that the 

Secretary of Defense direct the Secretary of the Army to direct the Chief 

of Engineers and Commanding General of the U.S. Army Corps of 

Engineers to clarify policy guidance:

• on the types of circumstances under which the state-of-the-art 

provision of the Dam Safety Assurance authority might apply to dam 

safety repair projects.

• for district offices to effectively communicate with sponsors to 

establish and implement cost sharing agreements during dam safety 

repair projects. For all dams, including the three dams named in the 

report, this would involve communicating estimated and final cost 

sharing amounts, executing agreements, and engaging sponsors to 

ensure cost share payment.

We provided a draft of this report to the Department of Defense (DOD) for 

official review and comment. In its written comments, which are reprinted 

in appendix III, DOD concurred with our recommendations and described 

the actions it plans to take within the next 18 months.

Recommendations

Agency Comments 
Page 24 GAO-16-106 Army Corps of Engineers

In response to our recommendation to clarify policy guidance on the types 

of circumstances under which the state-of-the-art provision of the Dam 

Safety Assurance authority might apply, the department stated that the 

ASA(CW) will clarify the usage of the provision within the next 18 months.

Regarding our recommendation to clarify policy guidance for district 

offices to communicate with sponsors to establish and implement cost 

sharing agreements, DOD stated that ASA(CW) will review and clarify 

policy, guidance, and business practices related to communication with 

sponsors within the next 18 months. With respect to the three dam safety 

repair projects identified in our report, the department stated that the 

ASA(CW) will engage with their sponsors to establish a path forward to 

recouping the federal investment in the Corps’ work, including finalization 

of water supply agreements.

We are sending copies of this report to the appropriate congressional 

committees and the Secretary of Defense, the Secretary of the Army, the 

Chief of Engineers and Commanding General of the U.S. Army Corps of 

Engineers, and other interested parties. In addition, the report will be 

available at no charge on GAO’s website at http://www.gao.gov.

If you or your staff have any questions, please contact me at (202) 512-

2834 or rectanusl@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix IV.

Lori Rectanus

Director, Physical Infrastructure Issues
Appendix I: List of Sponsors Interviewed

Page 25 GAO-16-106 Army Corps of Engineers

The table below lists all sponsors we interviewed for this report. Not all 

sponsors for the dams included in our review were available for interview. 

Additionally, because the Southeastern Power Administration (SEPA) is a 

major cost sharing sponsor, we interviewed the Tennessee Valley Public 

Power Association, an organization that represents 155 local utilities 

across seven states that purchase wholesale power marketed by SEPA.

Table 3: List of 10 Sponsors Interviewed

Dam, State Sponsor(s)

Bolivar and Dover, OH Muskingum Watershed Conservancy District

Canton Lake, OK Oklahoma City Utilities Department

Center Hill, TN City of Cookeville Department of Water Control, DeKalb Utility 

District, City of Smithville, Southeastern Power Administration

Isabella, CA Kern River Watermastera

Pine Creek, OK International Paper Company

Rough River, KY Grayson County Water District

Tuttle Creek, KS State of Kansas (Kansas Water Office)

Wolf Creek, KY Southeastern Power Administration

Source: GAO | GAO-16-106

a

The Kern River Watermaster represents five interests: (1) Kern Delta Water District, (2) Buena Vista 

Water District, (3) City of Bakersfield, (4) North Kern Water Storage District, and (5) Kern County 

Water Agency. 

Appendix I: List of Sponsors Interviewed
Appendix II: List of 16 Dam Safety Repair 

Projects Reviewed

Page 26 GAO-16-106 Army Corps of Engineers

These projects received funding for design and construction from fiscal year 2007 to fiscal 

year 2016

#

Dam 

name, 

state

Potential failure 

mode Repair

Project 

sponsor

Cost 

sharing 

agreement’s 

% Authority

Final/latest 

project cost

Estimated 

cost sharing 

amount

1 Addicks & 

Barker 

Dams, TX

Embankment 

erosion through 

seepage

• Construct new outlet structures with 

three gated conduits to pass water at 

Addicks and Barker

• Grout and abandon in place existing 

outlet structures at Addicks and Barker

• Construct 1,400-foot long cutoff wall 

along Barker 

None N/A MR $129,883,000 N/A

2 Bluestone 

Dam, WV

Inability to safely 

pass excess water 

during expected 

maximum flood 

conditions

• Stabilize dam with 564 anchors and 

concrete blocks

• Construct 330-foot wide auxiliary 

spillway

None N/A DSA $527,300,000 N/A

3 Bolivar 

Dam, OH

Foundation erosion 

through seepage

• Construct 4,500-foot underground 

concrete wall along embankment

• Replace 6 service gates and 

rehabilitate associated machinery

Muskingum 

Watershed 

Conservancy 

District

23.00% MR $109,284,000 $25,135,320 

4 Canton 

Lake Dam, 

OK

• Inability to safely 

pass excess water 

during expected 

maximum flood 

conditions

• Inability to 

withstand expected 

maximum 

earthquake

• Stabilize dam with 64 anchors

• Construct 480-foot wide auxiliary 

spillway

Oklahoma 

City Utilities 

Department

25.50% DSA $183,800,000 $7,030,350a

5 Center Hill 

Dam, TN

Embankment 

erosion through 

seepage

• Grout and construct 1,000-foot 

concrete cutoff wall along main dam 

embankment

• Construct 900-foot wide reinforcing 

berm downstream of auxiliary dam 

embankment

Southeastern 

Power 

Administration

42.545% MR $364,200,000 $154,948,890 

City of 

Cookeville 

Department of 

Water Control

0.5330% MR $1,941,186 

City of 

Smithville

0.0320% MR $116,544 

Dekalb Utility 

District

0.0530% MR $193,026 

North 

Alabama 

Bank

0.0100% MR $36,420 

Appendix II: List of 16 Dam Safety Repair 

Projects Reviewed
Appendix II: List of 16 Dam Safety Repair 

Projects Reviewed

Page 27 GAO-16-106 Army Corps of Engineers

#

Dam 

name, 

state

Potential failure 

mode Repair

Project 

sponsor

Cost 

sharing 

agreement’s 

% Authority

Final/latest 

project cost

Estimated 

cost sharing 

amount

6 Clearwater 

Lake Dam, 

MO

Embankment 

erosion through 

seepage

Grout and construct 4,200-foot concrete 

cutoff wall along embankment

None N/A MR $211,440,000 N/A

7 Dover 

Dam, OH

Inability to safely 

pass excess water 

during expected 

maximum flood 

conditions

• Raise dam by 8 feet along 860-foot 

length

• Stabilize dam with 140 anchors

Muskingum 

Watershed 

Conservancy 

District

23.00% DSA $60,000,000 $2,070,000a

8 East 

Branch 

Dam, PA

Embankment 

erosion through 

seepage

Grout and construct 2,100-foot concrete 

cutoff wall within the embankment

None N/A MR $248,000,000 N/A

9 Emsworth 

Dam, PA

• Gate failure

• Failure of erosion 

protection

• Install 14 new gates and gate hoisting 

systems

• Install 1,700 feet of erosion protection 

across both dams and 120 feet 

downstream of both dams

Inland 

Waterways 

Trust Fund

50% MR $160,000,000 $48,146,000b

10 Herbert 

Hoover 

Dike, FL

Embankment 

erosion through 

seepage

• Install internal erosion protection 

through entire length of embankments 

(80 miles) 

• Replace 28 and remove 4 water 

control structures

None N/A MR $2,069,510,000 N/A

11 Isabella 

Dam, CA

Main and auxiliary 

dams:

• Inability to safely 

pass excess water 

during expected 

maximum flood 

conditions

Auxiliary dam:

• Inability to 

withstand expected 

maximum 

earthquake and fault 

rupture

• Embankment 

erosion through 

seepage

Main dam:

• Raise dam by 16 feet along 2,000-foot 

embankment

Auxiliary dam:

• Raise dam by 16 feet along 3,500-foot 

embankment

• Construct 80-foot wide downstream 

buttress along 3,500-foot embankment

• Construct new emergency spillway 

900-foot wide

North Kern 

Water 

Storage 

District;

Buena Vista 

Water 

Storage 

District;

Kern Delta 

Water District;

City of 

Bakersfield;

Kern County 

Water Agency

21% DSA $680,771,000 $21,444,287a

12 Lockport 

Dam, IL

Embankment 

erosion through 

seepage

• Construct 4,300-foot slurry trench wall 

along right embankment

• Construct 1,200-foot roller-compacted 

concrete wall on right embankment to 

replace existing wall

• Rehabilitate 2.5 miles of existing 

concrete cutoff wall along left 

embankment

Inland 

Waterways 

Trust Fund

50% MR $149,175,575 $14,400,000c
Appendix II: List of 16 Dam Safety Repair 

Projects Reviewed

Page 28 GAO-16-106 Army Corps of Engineers

#

Dam 

name, 

state

Potential failure 

mode Repair

Project 

sponsor

Cost 

sharing 

agreement’s 

% Authority

Final/latest 

project cost

Estimated 

cost sharing 

amount

13 Pine 

Creek 

Dam, OK

Embankment 

erosion into and 

along conduit pipe

• Construct 124-foot concrete cutoff 

wall

• Install 480-foot steel pipe liner for 

conduit

International 

Paper 

Company

8% MR $29,900,000 $2,392,000 

14 Rough 

River 

Dam, KY

Embankment 

erosion through 

seepage

Grout and construct 1,700-foot concrete 

cutoff wall along embankment

Grayson 

County

0.0868% MR $147,000,000 $127,596 

City of 

Leitchfield

0.0380% MR $55,860 

15 Tuttle 

Creek 

Dam, KS

Seepage and piping 

after embankment 

slope failure caused 

by a seismic event

• Construct 351 shear walls

• Rehabilitate equipment for 18 gates

State of 

Kansas, 

Kansas Water 

Office

2.49% DSA $166,700,000 $622,625a

16 Wolf 

Creek 

Dam, KY

Embankment 

erosion through 

seepage

Grout and construct 4,000-foot concrete 

cutoff wall along embankment

Southeastern 

Power 

Administration

55.113% MR $593,710,821 $327,211,844 

Legend: MR = Major Rehabilitation authority; DSA = Dam Safety Assurance authority

Source: GAO analysis based on U.S. Army Corps of Engineers data. | GAO-16-106

a

The amount reflects an 85 percent reduction in cost share due to application of the Dam Safety 

Assurance authority.

b

The cost share for this project was reduced due to congressional actions in fiscal year 2009.

c

A portion of this project’s cost was shared with the Inland Waterways Trust Fund (IWTF). Prior to 

fiscal year 2014, the Corps contributed 100 percent to the project. Fiscal year 2014 allocations are 50 

percent Corps and 50 percent IWTF.
Appendix III: Comments from the Department 

of Defense

Page 29 GAO-16-106 Army Corps of Engineers

Appendix III: Comments from the 

Department of Defense
Appendix III: Comments from the Department 

of Defense

Page 30 GAO-16-106 Army Corps of Engineers
Appendix III: Comments from the Department 

of Defense

Page 31 GAO-16-106 Army Corps of Engineers
Appendix III: Comments from the Department 

of Defense

Page 32 GAO-16-106 Army Corps of Engineers
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 33 GAO-16-106 Army Corps of Engineers

Lori Rectanus, (202) 512-2834 or rectanusl@gao.gov

In addition to the contact named above, Michael Armes, Assistant 

Director; Irina Carnevale, Analyst in Charge; Geoffrey Hamilton; 

Georgeann Higgins; Vondalee Hunt; Davis Judson; SaraAnn 

Moessbauer; Joshua Ormond; and Amy Rosewarne made key 

contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Acknowledgments

(546062)
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 34 GAO-16-106 Army Corps of Engineers

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