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1 <br /> 26 Evaluation of Actions Taken on Colorado Water Conservation Board as of December 1999 1 <br /> Since about 1985,loan payment reminder letters have been prepared using a word processor , <br /> and monthly merge lists, not a database. <br /> Implementation date: June 1999. 1 <br /> Water Conservation Board's Update (October 1999): <br /> In progress. Draft procedures have been developed to assure that borrowers receive billing <br /> statements that are timely and accurate. A review of all loan contracts was made to verify I <br /> the payment due dates. All discrepancies of billing dates are currently being reconciled with <br /> the borrowers. The billing statement procedures are currently being tested and should be <br /> implemented by January 1, 2000. <br /> Office of the State Auditor's Evaluation of Actions Taken <br /> (December 1999): <br /> In progress. The Board's staff has started taking steps toward ensuring the accuracy and I <br /> timeliness of bills sent to borrowers. We reviewed nine loan files and found evidence in <br /> seven of the files that showed bills were accurate and timely (i.e., payment histories). The <br /> remaining two files did not include this information, but this was expected, since the first <br /> payment on these loans had not yet come due. <br /> We found that procedures have been established to provide borrowers with billing 1 <br /> information such as payment due dates, loan amounts, payment allocation, and <br /> disbursements. The CWCB is currently in the process of reconciling any discrepancies <br /> between the Board's records and those of the borrowers with regard to payment due dates. <br /> Staff are using a spreadsheet to track the payment due dates for completed projects. Letters <br /> will then be sent to borrowers in October to verify the payment due dates as recorded by staff <br /> in this spreadsheet. Staff expect any discrepancies to be resolved by January 1, 2000. <br /> Adopt and Implement Policies to Handle Loan Collection Problems <br /> During the 1998 audit we found that about 35 percent of the annual loan payments required between I <br /> Fiscal Year 1995 and 1998 were not received in a timely manner. These delinquent loan payments <br /> cost the State more than$514,000 in lost interest revenue. We also identified a number of problems <br /> with how the Board handled late payments on loans. For example,the Board did not include a clause <br /> in contracts written prior to March 1998 that allowed it to impose late penalties or other sanctions <br /> against delinquent borrowers. We also found that no formal policies had been established detailing <br /> how staff monitor collections and, if necessary, how the Board could declare a loan a bad debt. <br /> 1 <br />