BOARD00631

• Board Meeting Date: 11/22/1999
• Description: CF Section - Special Purpose Accounts - Construction Fund Independent Auditors Account - Proposed
• Board Meetings - Doc Type: Memo

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Colorado Water Conservation Board

Department of Natural Resources
1313 Sherman Street
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]

STATE OF COLORt\DO

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MEMORANDUM

Bill Owens
Governor
Greg E. Walcher
Executive Director, DNR
Peter H. Evans
Director, CVVCB

TO:

Colorado Water Conservation Board Members

Mike Serlet, P.E., Chief, Water Supply Planning and Finance Section MJ
November 16, 1999

FROM:

DATE:

SUBJECT:

Agenda Item 16b - November 22-23,1999, Board Meeting
Water Supply Planning and Finance - Special Purpose Accounts
Construction Fund Independent Auditors Account - Proposed

Introduction

The State Auditor raised questions regarding the administration and management of the
Construction Fund Program as the result of the September 1998 performance audit. We
believe that most of the problems alluded to occurred a number of years ago and that fund
management has, in fact, improved substantially in the last few years and will continue to
. improve with policies recently adopted by the Board.

One method of assuring ongoing improvement and effective program management
would be to contract with an independent auditor/business consultant to perform an annual
comprehensive financial and performance audit. This memo propcses a special account be
created within the Construction Fund to provide a method of paying for the expenses
associated with an independent audit by a certified public accounting firm.

Backl!round

In September 1998, after more than a one-year investigation, the State Auditor's Office
issued a Performance Audit of the Colorado Water Conservation Board (CWCB) Construction
Fund Loan Program. The State Auditor's report included 18 measures for improvement of the
program and raised concerns about the size and management of the fund, the loan application
and approval process, and the administration of approved loans.