Report of State Auditor 1998 - Laserfiche WebLink

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I IReport of The Colorado State Auditor 47 Ipayments in a timely manner. We found that during this period payments were not received in a timely manner about 35 percent of the time. We defined a timely I payment as being received within 15 days of the payment due date. Our findings are shown in the following table: ITimeliness of Loan Payments Fiscal Years 1995 to 1998 INumber of Payments Received I 0-15 days 16 to 30 31 to 60 61 to 90 Over 90 Total Fiscal Year (timely) days late days late days late days late Loans I 1995 61 28 13 2 7 111 1996 76 23 14 1 6 120 1 1997 100 22 10 1 5 138 1998* 74 27 5 2 4 112 ITOTALS 311 100 42 6 22 481 Source: Office of the State Auditor analysis of Water Conservation Board records. I * Note: For Fiscal Year 1998 we reviewed only those loans with due dates of March 20, 1998, or earlier. The Board had an additional 40 loans that were active and due before the fiscal year-end. I Overall,delinquent loan payments have cost the State over$514,000 in lost interest revenue over this time period. We also found that one borrower has not made a Ipayment in six years and owes approximately$40,500 in back payments. I Contracts written before March 1998 did not have a clause that allowed the Board to impose late penalties and other sanctions against delinquent borrowers. As a result, in nearly all of its active loan agreements, the Board has limited options for dealing I with payment problems. If a borrower misses an annual payment,the Board does not assess a late penalty but merely adds an extra year to the borrower's repayment term. Further,in the past,management has viewed a payment made at any time during the I year as "on time" and, thus, has not assessed a penalty as long as the payment is eventually received before the next one was due. I During the audit, staff began drafting provisions to insert into contracts and promissory notes that would allow the Board to: I