An Audit Report on the Water Infrastructure Fund at the Water Development Board
Report Number 12-042
The Water Development Board (Agency) has processes for the Water Infrastructure Fund that are designed to help ensure that the Agency:
- Provides loans from the Water Infrastructure Fund to financially sound recipients.
- Prioritizes projects that receive loans from the Water Infrastructure Fund in accordance with statute.
- Provides Water Infrastructure Fund loans to eligible projects and monitors projects that receive loans from the Water Infrastructure Fund.
Although the Agency generally has adequate processes, it did not consistently adhere to some of those processes, and it could not provide evidence that it performed certain review functions as designed. For example:
- The Agency has developed policies, procedures, and other tools for assessing the creditworthiness of applicants for Water Infrastructure Fund loans. Because the Agency does not always use and document those tools, however, it cannot ensure that it consistently determines applicants' credit risk scores in accordance with guidelines.
- Although the Agency prioritizes funding decisions for the Water Infrastructure Fund in accordance with statute, it should develop documented policies and procedures to determine how to prepare some of the information it uses in its prioritization process. Specifically, it should develop documented policies and procedures to determine how to compile water use data, calculate water conservation savings, and identify the decade in which the demand for water will exceed the supply (referred to as "decade of need"). This would help to ensure that the Agency prioritizes funding decisions based on accurate calculations and data that it analyzes consistently.
- While the Agency provides Water Infrastructure Fund loans to eligible projects and monitors those projects in accordance with requirements, it should consistently use additional review processes required by its internal policies and procedures.
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