I Letter dated April 28, 1972, from the 39 DOC IOC The Denver Organizing Committee for the 1976 International Olympic Committee COMPTROLLER GENERAL'S PEPORT INTERIOR AND INSULAR AFFAIRS PLANS FOR STAGING THE DIGEST WHY THE REVIEW WAS MADE Legislation is proposed that would authorize a direct Federal appropriation GAO did not obtain comments on its report from the Department of the FINDINGS AND CONCLUSIONS Facilities planning The Denver committee estimated that construction of new facilities and improvements to existing facilities would cost a total of $67.1 million. These facilities were classified as (see p. 8 and app. II): Minimum essential--those without which the games could not Highly desirable--those considered not absolutely essential Total Cost (millions) $23.4 28.8 14.9 $67.1 The Denver committee and the city of Denver have asked for a direct Federal appropriation of $19.9 million to cover a major portion of the minimum essential facility costs. The Denver committee's studies showed that the revenue potential of the planned facilities, when used for commercial purposes after the games, would be insufficient to attract private investment capital. (See p. 9.) Tear Sheet AUG. 18,1972 The request for Federal funds included $17.5 million for the entire construction cost of five new sports facilities: a speed-skating arena, a bobsled-luge run, ski jumps, and facilities for two major skiing events. The plans contemplated afteruse of the new facilities by the city of Denver or by private interests. Federal funding was also to pay for certain temporary structures needed by the press, the athletes, the spectators, and for administrative purposes. (See pp. 9 through 14.) The cost estimates were preliminary and were not based on specific architectural and engineering designs or specifications. The Denver committee estimated that architectural and engineering services would cost about $1.2 million. (See pp. 9 and 10.) The Federal funding request further included $2.4 million for the acquisition of land by the city of Denver, to be used as a site for a new allpurpose arena and for improvements to the city-owned Mile High Stadium and coliseum. GAO's review raised questions regarding the adequacy of the justification for Federal funding of acquiring the land and of winterizing the plumbing system at Mile High Stadium. (See pp. 15 through 18.) Proposed operating budget The Denver committee estimated it would incur operating expenses of $15 million for planning and construction activities starting in fiscal year 1973 and for staging the games in 1976. Anticipated operating income ranges from $10.3 million to $15.8 million, depending on amounts to be received from admissions and television contracts. (See p. 22.) If income falls below expenses, the resulting deficits are proposed to Financing of planning activities to date From its inception through May 1972, the Denver committee's accounts showed income of $1.6 million and expenses of $1.5 million. Over 80 per cent of the income was obtained from the State of Colorado and the city of Denver. (See p. 27.) GAO reviewed transactions representing about 20 percent of the expenditures to May 31, 1972. They were incurred for what appeared to be reasonable and proper expenses. Accountability for funds Because the Denver committee received funds from the State and the city, it is accountable to both for its income and expenditures. The Denver committee's certificate of incorporation provides that it is responsible to the city of Denver for all receipts and disbursements. Its financial statements were audited annually by a firm of certified public accountants, and the firm considered them to be stated fairly. (See p. 29.) The Department of the Interior--which would administer the proposed Federal Other possible Federal assistance The Department of the Interior stated that it would need funds to administer the act that would provide direct Federal funding for the games but that the amount had not been determined. (See p. 31.) The Department of Defense would be requested to provide military personnel (costing about $4.6 million) and equipment (no cost estimate available). (See p. 31.) The Department of Agriculture would incur costs of about $144,000 to issue and administer à special-use permit for the private development of Forest Service land on which certain skiing events would be held. (See p. 32.) The Department of Transportation was not expected to incur additional costs for certain proposed improvements of highway and airport facilities in the area because these would be financed by rearranging priorities among federally funded projects. (See p. 32.) Environmental aspects In June 1972 Interior's Bureau of Outdoor Recreation issued a draft of a MATTERS FOR CONSIDERATION BY THE COMMITTEE Architectural and engineering plans and The Denver committee stated that better cost estimates were not available because of the lack of funds for architectural and engineering design work for the specific facilities. Also, until more detailed environmental impact studies have been made, the specific environmental aspects of the proposed facilities will not be known. Tear Sheet The Committee may wish to make an initial authorization limited to the amount necessary for financing (1) the architectural and engineering services necessary to reasonably determine the estimated costs of the proposed facilities and (2) the studies needed to determine more specifically the environmental impact of these facilities. (See p. 35.) Decision on staging the four-man bobsled events The Denver committee's request for Federal funds included $4 million for the construction of a combined two-man bobsled-luge run. It did not plan to stage the customary four-man bobsled event and had requested that the International Olympic Committee approve elimination of the event. If the International Committee insists on the event, alternative facilities would have to be provided at costs varying from $2.9 million to $5.6 million in lieu of the proposed $4 million facility. The specific funding needs for the bobsled-luge facilities will not be known until the International Committee has made its decision, which is expected at its August 1972 meeting. (See p. 35.) Justification of all-purpose arena land acquisition The request for direct Federal funding included $1.5 million for the acquisition of land by the city of Denver to be used as the site of an all-purpose arena for ice hockey and skating events. The request classified the land acquisition as minimum essential but classified the arena to be built on that land as highly desirable. The city of Denver believed that, if the land was made available through Federal funds, the proposed city bond issue to finance construction of the arena was almost certain to be accepted by the voters. The Committee may wish to require additional justification for the funding of the land acquisition. (See p. 36.) Justification of winterized plumbing for Mile High Stadium Federal funding of $500,000 for winterizing the plumbing system at Mile High Stadium was requested because the stadium was to be used for the opening and closing ceremonies in February 1976 and for other purposes. On the basis of discussions with city engineers, GAO questions the need for this improvement. The Committee may wish to require additional justification from the city of Denver before authorizing this item. (See p. 37.) Audit authority The proposed legislation should provide authority for the Secretary of the Interior and the Comptroller General to examine and audit the records of grant recipients. (See p. 37.) |