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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14 Evaluation of Actions Taken on Colorado Water Conservation Board as of December 1999 1
b. Ensuring that all studies contain sufficient information upon which to assess the project's '
benefit and the applicant's ability to pay its loan obligations.
Water Conservation Board's Response
Report Res I
p p
(September 1998):
Agree. Beginning immediately, the CWCB staff will be more diligent in assuring that all
pending and future feasibility studies are completed before the project is presented to the
Board and that they contain the information needed to assess the applicant's ability to repay I
the proposed loan.
Requiring that all studies be completed before the Board can consider them may cause I
unreasonable delay for a limited number of projects. It might also prevent the General
Assembly from adding projects during the legislative process. The Board has only
recommended authorization for project loans without a completed study where there is al
adequate information available to be confident that the proposed project is feasible and where
the borrower demonstrates sufficient interest in completing the studies. Review and I
acceptance of the completed study has been specified as a final condition of the funding in
these cases.
Implementation Date: Immediately.
Water Conservation Board's Update (October 1999): '1
Implemented. The CWCB Board adopted a policy titled Procedure for Ensuring the I
Completion and Approval ofAdequate Construction Fund Project Feasibility Studies Prior
to Contracting and Disbursement of Loan Funds at its September 27, 1999,Board meeting
that addresses the auditor's project feasibility study concerns and recommendations. I
Office of the State Auditor's Evaluation of Actions Taken
(December 1999): •
Implemented. In response to our audit, the CWCB developed a policy that requires a
feasibility study to be completed prior to a loan's consideration by the Board. In cases where
it is impractical to complete the study prior to Board approval and/or General Assembly
authorization,the policy allows the Board to consider conditional approval—that is,approval
contingent upon the completion of the feasibility study by a specified date. To ensure the
feasibility studies contain sufficient information for the Board to assess the project's benefit is
and the applicant's ability to pay its loan obligations, the policy requires the studies be
prepared following the Board's Construction Fund Guidelines. This policy became effective
October 1, 1999. 1
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