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<br />Report of The Colorado State Auditor <br /> <br />5 <br /> <br />The Board does not require the project sponsor to pay interest on funds advanced during the <br />construction phase of a project. Interest charges begin after the project is completed. As a result, <br />the Board is losing interest on these funds. This means there is less money available to fund <br />other projects. <br /> <br />The Board should charge interest on cash disbursements made to project sponsors during <br />the construction phase of projects. Interest charges could be added to the principal amount <br />of the loan and financed over the term of the loan. <br /> <br />Colorado Water Conservation Board Response: <br /> <br />Agree. The CWCB is in the process of developing and implementing a policy of <br />charging interest on cash d1sbursements made during the construction phase of <br />authorized projects. <br /> <br />Monitoring Project Status <br /> <br />The Board annually recommends projects for funding to the General Assembly. If the General <br />Assembly approves a project for funding, monies are authorized for the project from, the <br />Construction Fund. The Board's current practice is to review its list of contracts annually to <br />determine if construction on a project was initiated. If construction has not started within five <br />years, project sponsors are contacted to determine if the funds should be deauthorized. <br /> <br />Project sponsors do not always go ahead with an authorized project. An extended period can <br />pass between the time of authorization and eventual deauthorization. For example, since 1980, <br />32 projects have been de authorized. The average length of time that passed before deauthorization <br />was five years. Construction has not started on 11 projects that were authorized for a' total of <br />$22 million prior to the 1988 legislative session. This means that $22 million has been <br />committed to projects where construction lapsed for four or more years after authorization. <br /> <br />The Board should improve its monitoring of projects by contacting project sponsors at least <br />annually to determine if project sponsors plan to go ahead with the projects. Responses <br />should be documented and reported to the General Assembly on an annual basis. <br /> <br />Colorado Water Conservation Board Response: <br /> <br />Agree. The CWCB is in the process of developing and implementing procedures <br />for monitoring authorized projects that have not initiated construction. A status <br />summary evaluation for each project will be included in the CWCB annual report. <br />