Report of State Auditor 1999

• Year: 1999
• Title: Report of the State Auditor
• CWCB Section: Finance
• Description: Evalation of Actions Taken on the 1998 Colorado Water Conservation Board Construction Fund Loan Program as of December 1999
• Publications - Doc Type: Tech Report

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Report of The Colorado State Auditor 7
Office of the State Auditor's Evaluation of Actions Taken
(December 1999):
In progress. In response to our audit recommendation,the CWCB developed a new financial
projection model that allows the Board to modify the assumptions used to estimate the
Construction Fund's future cash balances, receipts, and disbursements. We reviewed the
model and found the following:
• Severance Tax Receipts. The CWCB has improved its financial projection model by
including severance tax receipts in the calculation.
• Interest Receipts. The financial projection currently uses a 6 percent return rate,which
is more reflective of actual returns on monies deposited at the State Treasury. Further,
the model allows the interest rate to be modified as needed to reflect changing
conditions.
• Disbursements. In the 1998 audit we found that the CWCB was using large plug figures
to estimate disbursements from the Fund. In its latest projections, the Board has
decreased the overall amount of plug figures from over$41 million to $1.5 million(for
unspecified feasibility studies).
Finally, we found that although the CWCB has taken steps to determine the future demand
for the Program and includes this information in its financial projections,the Board has not
assessed the effectiveness of its marketing efforts. The Board should pursue such an
evaluation to ensure it is doing all that is possible to market the Program.
Require Evidence That Other Financing Options Were Explored
According to statutes,project sponsors are required to explore all other means of financing before
Fund monies can be used for a project. In our 1998 audit we found instances where the Board
approved and sought legislative authorization for projects that did not need state financing.
Specifically,we reviewed applications and feasibility studies for nine projects that were approved
by the Board and later deauthorized because the projects were built using other funding. The
applications for five of these projects identified other possible funding sources, but were approved
anyway. In addition,applications for two of the nine projects indicated that no other funding sources
had been explored, even though it is a statutory requirement.
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