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...... _... <br /> t <br /> Report of The Colorado State Auditor 27 <br /> ' Improvements were also needed in the staff's communication with the Board regarding delinquent <br /> accounts. <br /> 111 Recommendation No. 15 (September 1998): <br /> The Water Conservation Board should formally adopt policies and procedures for handling loan <br /> collection problems and ensure that staff implement procedures that address the development of: <br /> • Formal processes for identifying and dealing with collections problems. <br /> • Criteria for declaring bad debt and procedures for referring bad debt to Central Collections <br /> and/or the Attorney General's Office to take appropriate legal action against the borrower. <br /> • Regular and comprehensive reporting of collections issues to the Board. <br /> Water Conservation Board's Report Response <br /> (September 1998): <br /> Agree. The CWCB staff will develop proposed procedures, policies, and criteria for <br /> ' resolving loan collection problems for consideration by the Board by June 30, 1999. <br /> The overall repayment record for CWCB loans is excellent. The number of loans which have <br /> encountered significant delinquency problems is minimal, and only one loan has formally <br /> been declared to have been in default. Even though the COFRS system does not support loan <br /> portfolio, the Board members indicate that they feel fully aware of every significant <br /> delinquency. Deferment of payments to help borrowers in financial hardship, however, <br /> differs from "delinquency," and there appear to be several deferred loan payments that are <br /> incorrectly being characterized delinquent because of irregular or late annual payments. <br /> Finally, the state collection process should be considered a means of last resort. The state <br /> collection process creates bad will among intended beneficiaries and is rarely cost effective <br /> for the Loan Program because half of the collected amount is retained by the collection <br /> agency. <br /> Implementation date: June 1999. <br /> Water Conservation Board's Update (October 1999): <br /> Implemented. The CWCB Board adopted a policy titled Construction Fund and Severance <br /> Tax Perpetual Base Account Loan Delinquency, Loan Restructuring and Collection at its <br /> September 27, 1999, Board meeting that addresses the auditor's loan collections concerns <br /> and recommendations. <br /> 1 <br /> 1 <br />