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I <br /> Report of The Colorado State Auditor 9 <br /> identified only one application that provided a contact name at a bank where a loan had been <br /> sought but denied. Even though information was generally inadequate, seven of the nine <br /> applications were approved by the CWCB and authorized by the General Assembly. The two <br /> remaining applications were received recently and had not yet gone through the approval <br /> process. <br /> The Board did establish an additional requirement in October 1999 which asks applicants to <br /> provide a "summary of the results of applications to all other lenders to which the project <br /> sponsor has applied for f inding of the proposed project." This requirement could not be <br /> tested, however, because of its relative newness. <br /> Overall, we believe that the Board needs to do more to ensure adherence to its application <br /> requirements. Simply in tituting policies will not ensure compliance. The Board should <br /> consider the following: providing more guidance to applicants about its loan application <br /> requirements, rejecting incomplete applications and/or feasibility studies, and providing <br /> more training to the staff who review loan applications. <br /> I <br /> Ensure Projects Adhere: to Statutory Funding Priorities <br /> Statutes mandate the order in ,which monies from the Construction Fund should be spent. <br /> Specifically, the first priority goes to projects that will increase the beneficial consumptive use of <br /> Colorado's undeveloped, compact-entitled waters. The remaining funds should be applied toward <br /> projects that repair and/or rehabi itate existing water storage and delivery systems, maintain the <br /> State's satellite monitoring syster 1,or promote efficient management and operation of agricultural <br /> and multipurpose water systems. in our 1998 audit we found a number of projects that were funded <br /> under the Program that did not appear to be consistent with these statutory priorities. For example, <br /> we found that the Board approved nine loans totaling$9 million to refinance existing loans from the <br /> United States Bureau of Land Reclamation. We questioned whether these loans increased the <br /> beneficial consumptive use of Colorado's undeveloped waters or met any of the other statutory <br /> funding priorities. <br /> Recommendation No. 4 (September 1998): <br /> The Water Conservation Board should ensure that all projects receiving funding under the <br /> Construction Fund Loan Program clearly adhere to the funding priorities established by statute. If <br /> the Board desires to expand the statutory funding priorities, it should work with the General <br /> Assembly to effect these changes. <br /> N <br /> I <br /> I <br />