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1 <br /> Report of The Colorado State Auditor 21 <br /> Office of the State Auditor's Evaluation of Actions Taken <br /> (December 1999): <br /> In ress.ro Effective September 1, 1999, the CWCB instituted procedures aimed at <br /> P g P <br /> ensuring that all security instruments are prepared and recorded in a timely manner. Staff <br /> are provided with step-by-step procedures on how to submit a deed of trust to the appropriate <br /> county clerk for recording and how to amend a recorded deed of trust to reflect changes made <br /> in the contract. Instructions are also provided on how to prepare and file the appropriate <br /> UCC-1 documents with the Secretary of State. <br /> One problem with the new procedure is that it does not provide specific guidance to staff in <br /> regard to what is considered a "timely" filing (ten days from contract execution was the <br /> informal deadline used at the time of the original audit). The Board should consider setting <br /> formal standards in this area so that staff can easily demonstrate they have met the Board's <br /> expectations. The informal ten-day deadline is probably appropriate, since a review of five <br /> recent loan files showed that the majority of security documents are filed within this time <br /> frame. <br /> We also noted that through a recent file review, the Board identified 21 deeds of trust that <br /> still need to be prepared and recorded. Attending to these cases should be a priority for staff. <br /> Ensure Borrowers Comply With General Liability Insurance <br /> Requirements <br /> The CWCB requires that borrowers maintain general liability insurance from the time of contract <br /> execution until their loan is repaid. In addition, for contracts dated 1995 and after, the State must <br /> be named as an additional insured on any insurance policy. To comply with insurance requirements, <br /> borrowers must provide the Board with a certificate of insurance (including an additional insured <br /> endorsement) and documentation of policy renewal as needed throughout the life of the loan. For <br /> the 1998 audit,we reviewed the CWCB's 154 active loans and found that in 41 cases (27 percent) <br /> there was no evidence that the borrower had obtained the required liability insurance. <br /> Recommendation No. 11 (September 1998): <br /> The Water Conservation Board should ensure that borrowers comply with general liability insurance <br /> requirements. This may include charging late fees if required documentation is not provided in a <br /> timely manner. <br /> I <br /> I <br />