Report of State Auditor 1998 - Laserfiche WebLink

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I 26 Construction Fund Loan Program Performance Audit-September 1998 projects that started construction six years after approval of the project. Therefore, the construction funds were idle for over six years before starting construction. Other states have time limits for using funds that have been approved for water projects. We found four states (i.e., Wyoming, Nebraska, Texas, and Utah) that provide loans for water projects through programs similar to Colorado's Construction Fund Loan Program. None of these programs allows continuous appropriation of project funds. Funding availability limits vary from one to four years. Also, in Colorado,monies appropriated to state agencies from the Capital Construction Fund that are not used or encumbered within a three-year period revert to the General Fund. Establishing time limits for spending project funds and seeking timely deauthorization of unspent funds will increase the benefit of the Program. I Recommendation No. 5: 1 The Water Conservation Board should establish reasonable time limits for project sponsors to use monies authorized from the Construction Fund. The time limits should be based on the average time needed to start a project. Upon expiration of the time limit,project deauthorization should be automatically sought unless the Board specifically authorizes an extension. Also,the Board should establish a process that ensures any residual funding is immediately deauthorized upon project completion. Water Conservation Board Response: Agree. The duration of funding assistance has been reviewed annually by the Board and the General Assembly. The Board has not considered rigid time limits for the Construction Fund loan approvals and,given the political nature of some projects,it seems appropriate to at least present and evaluate options to the Board before proposing an amendment to the statute or to the Board's Guidelines. The Board will present its assessment of this issue, along with any recommended action, to the Governor and the General Assembly by February 1, 1999. The Board's Guidelines provide that, in September of each year, the Board will review the status of all previously authorized projects which are as yet not started or are unfinished. The Board will review for reasonable progress on all projects which have (1)not started 24 months after authorization, and (2)projects still in process 36 months after authorization I I