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I <br /> IReport of The Colorado State Auditor 5 <br /> 3 <br /> I (e.g.,number of loan payments received on time,number of requests for payment processed $'" ' <br /> within a given time frame, percentage of loans in compliance with the Board's insurance <br /> I re adding measures such as these so <br /> requirements). v_itil a uirements . The Board should consider ang per `� <br /> ` <br /> that the General Assembly and other interested parties have a more comprehensive picture ,k �';kx <br /> of how well the Program is operating on a day-to-day basis. k % k <br /> The Board has established mechanisms to monitor and report on the implementation of `4'\ <br /> procedures intended to improve the Program. To date, however, the Board has monitored 0' <br /> I and reported only on the status of the 1998 audit recommendations. Although actions taken <br /> in response to the audit recommendations are intended to improve the operations of the <br /> Program,it is unknown w`iether the Board will continue its efforts to monitor and report on <br /> Iimprovements related to the Program after the audit process is finished. <br /> IImprove Methods for Estimating Fund Receipts and Disbursements <br /> I In the 1998 audit we found that a large cash balance existed in the Construction Fund during Fiscal <br /> Years 1994 to 1998. The average cash balance during this time was$91.5 million. On the basis of <br /> several assumptions, we estimated that the Program could reasonably operate with a cash balance <br /> I of about $39 million. We concl jded that the Board should consider either increasing its rate of <br /> disbursements or work with the General Assembly to use excess money in the Fund for other worthy <br /> pursuits. <br /> Inane <br /> effort to manage the cash balance in the Fund, the Board attempted to estimate the Fund's <br /> future cash balance,receipts,and disbursements over a ten-year period(Fiscal Years 1997 to 2006). <br /> IStaff projected that the Fund's -:ash balance would be about $8 million by Fiscal Year 2006. <br /> However, we found that some of the assumptions used by staff in conducting this projection were <br /> not accurate, resulting in an unrealistically low ending balance in Fiscal Year 2006. For example, <br /> I the Board's revenue projection did not include severance tax monies. Using what we considered to <br /> be more realistic assumptions,we estimated that the cash balance would be $148 million in Fiscal <br /> I Year 2006, $140 million more than the Board's projection. Further, we found that the Board had <br /> not adopted a formal marketing plan for the Program, which made it difficult to judge demand for <br /> construction funds. <br /> IRecommendation No. 2 Se p tember 1998). <br /> IThe Water Conservation Board should improve its methods for estimating the receipts and <br /> disbursements associated with the Construction Fund Loan Program. The Board should also assess <br /> I the effectiveness of its marketing efforts and determine if the demand for the Program is being met <br /> with the existing level of receipts. If the demand is being met, the Board should work with the <br /> I <br /> I <br />