Report of the State Auditor 1993

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Report of The Colorado State Auditor 3 Construction Fund Project Planning The management of water resources is a long-range commitment. Many projects require substantial and lengthy planning as well as several years to construct. Therefore, planning efforts should consider water needs and concerns well into the future. The Department of Natural Resources developed a four-year plan in early 1992. The Board's input was included in the plan. While the plan has some goals and objectives related to the Construction Fund, the Board has not developed its own long-term plan. The Board has not developed an implementation plan which prioritizes projects consistent with long-term goals, establishes milestones for monitoring, and provides performance measures to assess effectiveness. The Board should develop a formal, systematic program or process which provides a long- and short-term framework for the use of the Construction Fund. TWs process should include developing broad policy statements, establishing goals and implementation plans, and developing performance measures. Colorado Water Conservation Board Response: Agree. The CWCB is in the process of developing and implementing both a short- and long~term program and procedure for the use of the Construction Fund consistent with today's more complex fiscal, environmental, and legislative requirements, statutory requirements, the departmental plan, and the CWCB IIllSSlOn. Financial Management of the Construction Fund The Board has not developed a method for projecting the long-term financial status of the Construction Fund. While the Board has identified some long-term project needs, it has not developed a comprehensive implementation plan that shows how it will meet those needs. The Board recently reported to the Joint Budget Committee that disbursements from the Construction Fund could exceed $120 million over the next 10 years. In addition, the Board may have to fund unrecoverable operating expenses and studies authorized by the General Assembly. Recently, it began an effort to better define these future requirements on an annual basis. However, a similar forecasting need exists relative to determining how much money will be available in the Fund on a long-term basis. The Board should develop and implement an effective process for long-term financial planning for Construction Fund monies. This process should include establishing long-term funding needs, assessing current sources of funds, and projecting future funding requirements that may be needed to meet long-term goals.