Montana water pollution control and drinking water state rev

26 Pages·1999·1.1 MB·English

by  Montana. Legislature. Legislative Audit Division

s
657.835045
L72MWPC
2000
1
Legislative Audit Division
State ofMontana
Report to the Legislature
Financial Audit
June 2001
For the Fiscal Year Ended June 30, 2000
Montana Water Pollution Control
and Drinking Water State Revolving
Fund Programs
Department of Environmental Quality
Department of Natural Resources and Conservation
We performed a Rnancial audit ofthe Montana Water Pollution Control and
Drinking Water State Revolving Fund Programs for the fiscal year ended
June 30, 2000. This report contains the audited Rnancial statements and
accompanying notes for fiscal year 1999-00. We issued an unqualiRed
opinion on the Rnancial statements. The opinion means the reader may rely
on the Rnancial statement information presented.
DOCUMENTS COLLECTION
STATE
nin 0 1 2001
Direct comments/inquiries to:
Legislative Audit Division
Room 160, State Capitol
PO Box 201705
MT
OOSP-71 Helena 59620-1705
Help eliminate fraud, waste, and abuse in state government. Call the Fraud Hotline at 1-800-222-4446
statewide or444-4446 in Helena.
FINANCIAL AUDITS
Financial audits are conducted by the Legislative Audit Division to determine if an agency’s
financial operations are properly conducted, the financial reports are presented fairly, and the
agency has complied with laws and regulations that could have a direct and material effect on the
financial statements. In performing the audit work, the audit staff uses standards set forth by the
American Institute ofCertified Public Accountants and the United States General Accounting
Office. Financial audit staffmembers hold degrees with an emphasis in accounting. Most staff
members hold Certified Public Accountant (CPA) certificates.
Legislative Audit Division
Room
160, State Capitol
POBox 201705
MT
Helena 59620-1705
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
Senator John Cobb Representative Joe Balyeat
Senator Jim Elliott Representative Dee Brown
Senator Dan Harrington Representative Bill Eggers
Senator Ken Miller Representative Hal Jacobson
Senator Corey Stapleton Representative Jeff Pattison
Senator Jon Tester Representative David E. Wanzenried
LEGISLATIVE AUDIT DIVISION
Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors:
John W. Northey, Legal Counsel Jim Pellegrini, Performance Audit
&
Tori Hunthausen, IT Operations Manager James Gillett, Financial-Compliance Audit
June 2001
The Legislative Audit Committee
of the Montana State Legislature:
This is our report on the fiscal year 1999-00 financial audit ofthe Montana Water Pollution Control State
Revolving Fund (WPCSRF) and Drinking Water State Revolving Fund (DWSRF) Programs. The Department
ofNatural Resources and Conservation requested the audit ofthese programs because annual audits are
required by the federal Environmental Protection Agency.
The objectives ofa financial audit include determining ifthe programs’ financial statements present fairly its
We
financial position at June 30, 2000, and the results ofits operations for the fiscal year then ended. tested
compliance with state and federal laws that have a direct and material impact on the financial statements.
The WPCSRF program provides loans at a reduced interest rate to finance construction of publicly-owned
water pollution control facilities, non-point source pollution control projects, and estuary management plans.
Water Pollution control loans must be repaid within 20 years. As ofJune 30, 2000, the Water Pollution
Control Program had $44,579,454 ofoutstanding loans.
The DWSRF provides low interest loans to communities for the construction ofdrinking water treatment
facilities. Drinking water loans may be financed up to 30 years. At June 30, 2000, the Drinking Water
Program had $18,799,372 ofoutstanding loans.
On page A-1, you will find the Independent Auditor’s Report followed by the financial statements and
accompanying notes. We issued an unqualified opinion which means the reader can rely on the presented
information. The programs’ financial statements begin on page A-3. Our opinion on the programs’
supplementary financial information is on page B-1. The supplementary information begins on page B-3.
Beginning on page C-1 is our report on compliance and internal control which is required by Government
Auditing Standards issued by the Controller General ofthe United States. The departments have reviewed this
report and agree with the contents.
We thank the directors ofthe Department ofEnvironmental Quality and the Department ofNatural Resources
and Conservation and their stafffor cooperation and assistance during the audit.
Respectfully submitted.
Legislative Auditor
Room 160, State Capitol, PO Box 201705 Helena MT 59620-1705
Phone [phone] FAX [phone] E-Mail [email protected]
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Appointed and Administrative Officials
Department of Jan Sensibaugh, Director
Environmental Quality
Ann Danzer, Administrator, Centralized Services Division
Tom Livers, Chief, Technical and Financial Assistance Bureau
Department of Natural Bud Clinch, Director
Resources and
Conservation Anna Miller, Financial Advisor
Ann Bauchman, Administrator, Centralized Services Division
For additional information concerning the Montana Water Pollution
Control and Drinking Water State Revolving Fund Programs, contact
Anna Miller, Financial Advisor, at;
PO Box 201601
MT
Helena 59620-1601
[phone]
e-mail; [email protected]
The audit staff involved in this audit were Scott Hoversland and Jennifer Solem.
Digitized by the Internet Archive
in 2017 with funding from
Montana
State Library
https://archive.org/details/montanawaterpoll2000mont
LEGISLATIVE AUDIT DIVISION
Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors:
John W. Northey, Legal Counsel Jim Pellegrini, Performance Audit
&
Tori Hunthausen, IT Operations Manager James Gillett, Financial-Compliance Audit
INDEPENDENT AUDITOR’S REPORT
The Legislative Audit Committee
of the Montana State Legislature
We
have audited the accompanying Combined Balance Sheet ofthe Montana Water Pollution Control and
Drinking Water State Revolving Eund Programs’ Special Revenue and Debt Service Eunds, as ofJune 30,
2000 and the related Combined Statement ofRevenues, Expenditures, and Changes in Eund Balances,
Special Revenue and Debt Service Eunds, for the year then ended. These financial statements are the
responsibility of the management at the Montana Department ofEnvironmental Quality and the Montana
Department ofNatural Resources and Conservation. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with generally accepted auditing standards and Government
Auditing Standards issued by the Comptroller General ofthe United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosure in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
We
statement presentation. believe that our audit provides a reasonable basis for our opinion.
As discussed in the notes to the financial statements, the financial statements ofthe Montana Water
Pollution Control and Drinking Water State Revolving Eund Programs’ Special Revenue and Debt Service
Eunds are intended to present the financial position and results ofoperations ofonly that portion of the
financial reporting entity of the State of Montana that is attributable to the transactions ofthe specified
funds ofthe programs.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position ofthe Montana Water Pollution Control and Drinking Water State Revolving fund
Programs’ Special Revenue and Debt Service funds as ofJune 30, 2000, and the results of its operations
for the year then ended, in conformity with generally accepted accounting principles.
In accordance with GovernmentAuditing Standards, we have also issued our report dated february 23,
2001, on our consideration ofthe internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral
part of an audit performed in accordance with GovernmentAuditing Standards and should be read in
conjunction with this report in considering the results of our audit.
Room 160, State Capitol, PO Box 201705 Helena MT 59620-1705
Phone [phone] FAX [phone] E-Mail [email protected] Page A-1
This report is intended for the information and use of the Legislative Audit Committee, department
management, the Montana State Legislature, and the U.S. Environmental Protection Agency and should
not be used by anyone other than these specified parties. This report is a matter of public record and its
distribution is not limited.
Respectfully submitted.
James Gillett, CPA
Deputy Legislative Auditor
February 23, 2001
Page A-2
MONTANA WATER POLLUTION CONTROL AND DRINKING WATER
STATE REVOLVING FUND PROGRAMS
COMBINED BALANCE SHEET
SPECIAL REVENUE AND DEBT SERVICE FUNDS
JUNE 30, 2000
(FOR
WATER POLLUTION CONTROL DRINKING WATER MEMORANDUM
SPECIAL DEBT SPECIAL DEBT ONLY)
ASSETS REVENUE SERVICE REVENUE SERVICE TOTAL
Cash/Cash Equivalents $1,650,748 $560,247 $1,863,178 $180,523 $4,254,696
Due From OtherAccounting Entities 1,914 6,764 8,678
Expense Advances to Employees 500 1,300 1,800
Interest Receivable 60,585 252,875 19,221 76,717 409,398
Due from Federal Government 222,601 222,601
Investments 18,785,444 2,091,332 3,314,455 452,297 24,643,528
Loans Receivable 44,579,454 18,799,372 0 63,378,826
Total Assets $65,078,645 $2,904,454 $24,226,891 $709,537 $92,919,527
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payable 6,223 $31,435 37,658
Due to Other Accounting Entities 20,693 49,576 70,269
Vouchers Payable 4,410 31,903 36,313
Deferred Revnue 172,693 172,693
Interentity Loans Payable 3,000 125,000 128,000
Total Liabilities $207,019 $0 $237,914 $0 $444,933
FundBalances
Reserved for Loans Receivable $44,579,454 $0 $18,799,372 $0 $63,378,826
Unreserved, Undesignated 20,292,172 2,904,454 5,189,605 709,537 29,095,768
Total Fund Balances $64,871,626 $2,904,454 $23,988,977 $709,537 $92,474,594
Total Liabilities and Fund Balances $65,078,645 $2,904,454 $24,226,891 $709,537 $92,919,527
The accompanying notes to the financial statements are an integral part ofthis statement.
Page A-3
MONTANA WATER POLLUTION CONTROL AND DRINKING WATER
STATE REVOLVING FUND PROGRAMS
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
SPECIAL REVENUE AND DEBT SERVICE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
(FOR
WATER POLLUTION CONTROL DRINKING WATER MEMORANDUM
SPECIAL DEBT SPECIAL DEBT ONLY)
REVENUE SERVICE REVENUE SERVICE TOTAL
REVENUES;
Federal Capitalization Grant Revenue $6,528,885 $8,645,707 $15,174,592
Accomodations Tax 13 20 33
Interest Income on Investments 812,046 24,040 (20,463) 127,802 943,425
Interest Earnings 331,591 1,448,083 113,081 345,891 2,238,646
Administration and Origination Fees 230,958 384,583 615,541
TOTAL REVENUES $7,903,493 $1,472,123 $9,122,928 $473,693 $18,972,237
EXPENDITURES:
Program Administration/Set-Asides $395,162 $798,466 $1,193,628
State In-Kind Services-RIT 3,154 6,485 9,639
TOTAL EXPENDITURES $398,316 $0 $804,951 $0 $1,203,267
Excess Revenues Over/(Under) $7,505,177 $1,472,123 $8,317,977 $473,693 $17,768,970
OTHER FINANCING SOURCES:
General Obligation Bond Proceeds $3,325,000 $2,990,000 $6,315,000
Operating Transfers In:
Recycled Transfersfrom WaterPollution Control SRF 4,729,279 4,729,279
DebtService Sweep 60,924 40,795 101,719
Origination/Administrative Fee Transfer 146,640 244,180 390,820
RITTransfers In 3,154 6,485 9,639
Loan Loss Reserve Sweep 0
Total OtherFinancing Sources $3,389,078 $146,640 $7,766,559 $244,180 $11,546,457
OTHER FINANCING USES:
Bond Principal $385,000 $385,000
Bond Interest 547,080 171,680 718,760
Bond CostofIssuance 89,916 73,397 163,313
Arbitrage Rebate Tax 1,891 1,891
Operating Transfers Out:
Recycled Transfers to Drinking Water 4,750,328 4,750,328
DebtService Sweep 60,924 40,795 101,719
Origination/Administrative Fee Transfer 146,640 244,180 390,820
Loan Loss Reserve Sweep 0
Total Other Financing Uses $4,986,884 $994,895 $317,577 $212,475 $6,511,831
Excess(deficiency)ofrevenues and other
financing sources over(under)expenditures
and otherfinancing uses $5,907,371 $623,868 $15,766,959 $505,398 $22,803,596
Fund Balance -July 1, 1999 $58,964,255 $2,280,586 $8,221,575 $204,139 $69,670,555
PriorPeriod Adjustment 443 443
Adjusted Fund Balance -July 1, 1999 58,964,255 2,280,586 8,222,018 204,139 69,670,998
Fund Balance -June 30, 2000 $64,871,626 $2,904,454 $23,988,977 $709,537 $92,474,594
The accompanying notes tothe financial statements are an integral partofthis statement.
Page A-4