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I <br /> 40 Construction Fund Loan Program Performance Audit-September 1998 <br /> Timeliness of Filing <br /> Deeds of Trust <br /> Number of <br /> Days Deeds Filed <br /> 0 to 10 days 5 <br /> 11 to 30 days 3 1 <br /> 31 to 60 days 5 <br /> 61 to 180 days 7 1 <br /> over 180 days 62 <br /> Source: Office of the State Auditor I <br /> analysis of Board data. <br /> The Board Needs To Continue Improving Its Filing <br /> g g <br /> of UCC-1 Statements <br /> We also reviewed the Board's process for filing UCC-1 statements upon contract <br /> execution and then refiling them upon the five-year expiration date. In the past two <br /> years it appears that the Board has improved its efforts at filing initial UCC-1 <br /> statements. However,problems still exist. Specifically,when we reviewed a sample <br /> of 56 loans that required UCC-1 filings, we found that only two of these filings <br /> occurred within ten days of contract execution. The remaining 54 filings occurred <br /> anytime from three days to 18 years after contract execution. The Board also lacks <br /> a system for alerting staff when UCC-1 statements are about to expire. We found six <br /> instances where the UCC-1 statement was not renewed upon the expiration of the <br /> original filing. <br /> The Board needs to take immediate action to correct the problems we observed. <br /> Specifically, the Board should implement an effective system for monitoring loans <br /> so that the appropriate security documents are requested, received, and filed as <br /> required. The Board also needs to review its active loans to identify missing or <br /> outdated documentation and then take the proper actions to perfect the State's <br /> security interests. <br /> 1 <br /> 1 <br />