Montana Water Pollution Control and Drinking Water State Revolving Fund Programs : Department of Environmental Quality, Department of Natural Resources and Conservation : financial audit for the fiscal year ended June 30 ..

28 Pages·1999·0.75 MB·English

by  Montana. Legislature. Legislative Audit Division

s
353.9
L72MWPC
2003
Legislative Audit Division
StateofMontana
ReporttotheLegislature
March2004 Financial Audit
Forthe FiscalYearEndedJune30, 2003
Montana Water Pollution Control
and Drinking Water State Revolving
Fund Programs
DepartmentofEnvironmentalQuality
DepartmentofNaturalResourcesandConservation
WeperformedafinancialauditoftheMontanaWaterPollutionControl
andDrinkingWaterStateRevolvingFundProgramsforthefiscalyear
endedJune30,2003. Thisreportcontainstheauditedfinancialstatements
andaccompanyingnotesforfiscalyear2002-03. Weissuedanunqualified
opiniononthefinancialstatements. Theopinionmeansthereadermay
relyonthefinancialstatementinformationpresented.
COLLECTION
DOCUMENTS
STATE
2004
MONTANA|Tgf
Directcomments/inquiriesto:
LegislativeAuditDivision
Room160,StateCapitol
POBox201705
03SP-85 HelenaMT 59620-1705
Helpeliminatefraud,waste,andabuseinstategovernment. CalltheFraudHotlineat1-800-222-4446
statewideor444-4446inHelena.
MONTANASTATELIBRARV
3 0864 1002 2303 4
FINANCIALAUDITS
FinancialauditsareconductedbytheLegislativeAuditDivisiontodetermineifthefinancialstatements
includedinthisreportarepresentedfairlyandtheagencyhascompliedwithlawsandregulationshaving
adirectandmaterialeffectonthefinancialstatements. Inperformingtheauditwork,theauditstaffuses
standardssetforthbytheAmericanInstituteofCertifiedPublicAccountantsandtheUnitedStates
GeneralAccountingOffice. Financialauditstaffmembersholddegreeswithanemphasisinaccounting.
MoststaffmembersholdCertifiedPublicAccountant(CPA)certificates.
GovernmentAuditingStandards,theSingleAuditActAmendmentsof1996andOMBCircularA-133
requiretheauditortoissuecertainfinancial,internalcontrol,andcompliancereports. Thisindividual
agencyauditreportisnotintendedtocomplywiththeserequirements.TheLegislativeAuditDivision
issuesastatewidebiennialSingleAuditReportwhichcomplieswiththeabovereportingrequirements.
TheSingleAuditReportforthetwofiscalyearsendedJune30,2003,willbeissuedbyMarch31,2004.
TheSingleAuditReportforthetwofiscalyearsendedJune30,2001,wasissuedonMarch26,2002.
CopiesoftheSingleAuditReportcanbeobtainedbycontacting:
SingleAuditCoordinator LegislativeAuditDivision
OfficeofBudgetandProgramPlanning Room 160,StateCapitol
StateCapitol POBox201705
HelenaMT 59620 HelenaMT 59620-1705
Phone[phone]
MEMBERSOFTHELEGISLATIVEAUDITCOMMITTEE
SenatorJohnCobb RepresentativeDeeBrown
SenatorMikeCooney RepresentativeTimCallahan
SenatorJimElliott,ViceChair RepresentativeHalJacobson
SenatorJohnEsp RepresentativeJohnMusgrove
SenatorDanHarrington RepresentativeJeffPattison,Chair
SenatorCoreyStapleton RepresentativeRickRipley
LEGISLATIVE AUDIT DIVISION
ScottA. Seacat,LegislativeAuditor DeputyLegislativeAuditors:
JohnW.Northey,LegalCounsel JimPellegrini,PerformanceAudit
ToriHunthausen,ISAudit&Operations
JamesGillett,Financial-ComplianceAudit
March2004
TheLegislativeAuditCommittee
oftheMontanaStateLegislature:
Thisisourreportonthefiscalyear2002-03 financialauditoftheMontanaWaterPollutionControlState
RevolvingFund(WPCSRF)andDrinkingWaterStateRevolvingFund(DWSRF)Programs. The
DepartmentofNaturalResourcesandConservationrequestedtheauditoftheseprogramsbecauseannual
auditsarerequiredbythefederalEnvironmentalProtectionAgency.
Theobjectivesofafinancialauditincludedeterminingiftheprograms' financialstatementspresentfairly
theirfinancialpositionatJune30,2003,andtheresultsoftheprograms' operationsforthefiscalyearthen
ended. Wetestedcompliancewithstateandfederallawsthathaveadirectandmaterialimpactonthe
financialstatements.
TheWPCSRFprogramprovidesloansatareducedinterestratetofinanceconstructionofpublicly-owned
waterpollutioncontrolfacilities,nonpointsourcepollutioncontrolprojects,andestuarymanagementplans.
Waterpollutioncontrolloansarecomprisedoffederalgrantsandstatematchfunds,andmustberepaid
within20years. AsofJune30,2003,theWaterPollutionControlProgramhad$95,191,431 ofoutstanding
loans,includingadvancesfromotherfunds.
TheDWSRFprogramprovideslowinterestloanstocommunitiesfortheconstructionofdrinkingwater
treatmentfacilities. Drinkingwaterloansarecomprisedoffederalgrantsandstatematchfunds,andmaybe
financedupto30years. AtJune30,2003,theDrinkingWaterProgramhad$47,109,491 ofoutstanding
loans.
OnpageA-l,youwillfindtheIndependentAuditor'sReportfollowedbythefinancialstatementsand
accompanyingnotes. Weissuedanunqualifiedopinionwhichmeansthereadercanrelyonthepresented
information. Theprograms' financialstatementsbeginonpageA-3. Ouropinionontheprograms'
supplementaryfinancialinformationisonpageB-l. ThesupplementaryinformationbeginsonpageB-3.
BeginningonpageC-l isourreportoncomplianceandinternalcontrolwhichisrequiredbyGovernment
AuditingStandardsissuedbytheComptrollerGeneraloftheUnitedStates. Thedepartmentshavereviewed
thisreportandagreewiththecontents.
WethankthedirectorsoftheDepartmentofEnvironmentalQualityandtheDepartmentofNatural
ResourcesandConservationandtheirstaffforcooperationandassistanceduringtheaudit.
Respectfullysubmitted,
ScottA. Seacat
LegislativeAuditor
Room 160,StateCapitolBuildingPOBox201705Helena,MT 59620-1705
Phone[phone] FAX[phone] [email protected]
Digitized by the Internet Archive
in 2010 with funding from
Montana State Library
http://www.archive.org/details/montanawaterpoll2003mont
Appointed and Administrative Officials
Departmentof JanSensibaugh,Director
EnvironmentalQuality
TomLivers,DeputyDirector
AnnDanzer,ChiefFinancialOfficer,Financial Services
DepartmentofNatural BudClinch,Director
ResourcesandConservation
AnnaMiller,FinancialAdvisor
AnnBauchman,Administrator,CentralizedServicesDivision
ForadditionalinformationconcerningtheMontanaWaterPollution
ControlandDrinkingWaterStateRevolvingFundPrograms,
contactAnnaMiller,FinancialAdvisor,at:
POBox201601
HelenaMT 59620-1601
[phone]
e-mail: annamfestate.mt.us
TheauditstaffinvolvedinthisauditwereAngieLang
andAlexaO'Dell.
Page
i

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LEGISLATIVE AUDIT DIVISION
ScottA. Seacat,LegislativeAuditor /#A Ji\ DeputyLegislativeAuditors:
JohnW.Northey,LegalCounsel U^^SJJJPn JimPellegrini,PerformanceAudit
ToriHunthausen,ISAudit&Operations
JamesGillett,Financial-ComplianceAudit
INDEPENDENTAUDITOR'SREPORT
TheLegislativeAuditCommittee
oftheMontanaStateLegislature:
WehaveauditedtheaccompanyingCombinedBalanceSheetoftheMontanaWaterPollutionControl State
RevolvingFund(WPCSRF)andDrinkingWaterStateRevolvingFund(DWSRF)asofJune30,2003,and
therelatedCombinedStatementofRevenues,Expenditures,andChangesinFundBalanceforthefiscal
yearthenended. Theinformationcontainedinthesefinancialstatementsistheresponsibilityofthe
managementattheMontanaDepartmentofEnvironmentalQualityandtheMontanaDepartmentofNatural
ResourcesandConservation(departments). Ourresponsibilityistoexpressanopiniononthesefinancial
statementsbasedonouraudit.
WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesof
AmericaandstandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards,issued
bytheComptrollerGeneraloftheUnitedStates. Thosestandardsrequirethatweplanandperformthe
audittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterial
misstatement. Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsand
disclosuresinthefinancialstatements. Anauditalsoincludesassessingtheaccountingprinciplesusedand
significantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancial statement
presentation. Webelievethatourauditprovidesareasonablebasisforouropinion.
Asdiscussedinthenotestothefinancialstatements,thefinancialstatementsoftheMontanaWater
PollutionControlandDrinkingWaterStateRevolvingFundProgramsareintendedtopresentthefinancial
positionandresultsofoperationsofonlythatportionofthefinancialreportingentityofthestateof
Montanathatisattributabletothetransactionsoftheprograms.
Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,the
financialpositionoftheMontanaWaterPollutionControlandDrinkingWaterStateRevolvingFund
ProgramsasofJune30,2003,andresultsofoperationsforthefiscalyearthenended, inconformitywith
accountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.
Room 160,StateCapitolBuildingPOBox201705Helena,MT 59620-1705
Phone[phone] FAX[phone] [email protected] PageA-
InaccordancewithGovernmentAuditingStandards,wehavealsoissuedareportdatedMarch5,2004,on
ourconsiderationofthedepartments' compliancewithlawsandregulationsandthedepartments' internal
controlstructures.
Respectfullysubmitted,
JamesGillett,CPA
March5,2004 DeputyLegislativeAuditor
PageA-2
MONTANAWATERPOLLUTIONCONTROLANDDRINKINGWATER
STATEREVOLVINGFUNDPROGRAMS
COMBINEDBALANCESHEET
SPECIALREVENUEANDDEBTSERVICEFUNDS
JUNE30,2003
WATERPOLLUTIONCONTROL DRINKINGWATER
STATESPECIALFEDERALSPECIAL DEBT STATESPECIAL FEDERALSPECIAL DEBT
REVENUE REVENUE SERVICE REVENUE REVENUE SERVICE TOTAL
Cash/CashEquivalents $2,974,333 $772 $803,839 $3,547,226 $21,709 $701,163 $8,049,042
ExpenseAdvancestoEmployees 500 1.000 1,500
InterestReceivable 270.808 1.159.175 115.881 500.757 2.046.621
DuefromFederalGovernment 25.335 248.115 273.450
Investments 11.940.129 1.273.472 5.039.077 765.747 19.018,425
LoansReceivable 84.695.921 47.109,491 131.805.412
AdvancesfromOtherFunds 10.495.510 10,495,510
TotalAssets $110.376.701 $26,607 $3.236.486 $55,811,675 $270,824 $1,967,667 $171,689,960
LIABILITIESANDFUNDBALANCES
Umbllnios
AccountsPayable $25,775 $7,888 $270,689 $327,525
PayrollPayable 24.719 7.677 32.396
DeferredRevenue 30,395 30,438
InterentrtyLoansPayable 5,000 11,000 16,000
TotalLiabilities $55,494 $26,607 $0 $23,174 $301,084 $0 $406,359
FundBalances
ReservedforLoansReceivableandAdvance;! $91,923,022 $46,398,069 $138,321,091
Unreserved,Undesignated 18,398,185 $3,236,486 9,390,432 ($30,260) $1,967,667 32.962.510
TotalFundBalances $110,321,207 $0 $3,236,486 $55,768,50: ($30,260) $1,967,667
TotalLiabilitiesandFundBalances $110,376,701 $270,824 $1,967,667
TheaccompanyingnotestothefinancialstatementsareanIntegralpariofthisstatement
PageA-3
MONTANAWATERPOLLUTIONCONTROLANDDRINKINGWATER
STATEREVOLVINGFUNDPROGRAMS
COMBINEDSTATEMENTOFREVENUES,EXPENDITURES,ANDCHANGESINFUNDBALANCE
SPECIALREVENUEANDDEBTSERVICEFUNDS
FORTHEFISCALYEARENDEDJUNE30.2003
WATERPOLLUTIONCONTROL DRINKINGWATER
STATESPECIAL FEDERALSPECIAL DEBT STATESPECIALFEDERALSPECIAL DEBT
REVENUE REVENUE SERVICE REVENUE REVENUE SERVICE TOTAL
FederalCapitalizationGrantRevenue $17,080,715 $8,096,835 $25,177,550
$942,164 $15,477 $392,467 $185,744 1.535.851
InterestEarningsfromLoans 726.785 2.878.683 183.239 1.577.601 5.366.308
tandTOOnTgmAaLtjRoEnVFEeNeUsES 429.754 29 100,594 $8.096,190473 $1,763.345 530,484
EXPENDITURES
ExcessRevenuesOver/(Under) $6,592.361 tl.763.345
OTHERFINANCINGSOURCES
GeneralObligationBondsProceeds $4,405,000
OperatingTransfersIn
DebtServiceSweep 906.175
DebtServiceTransfertoBANFund 50.000
OnginationVAdministraLiveFees $263,053 36,724 $63,870 363.647
LoanLossReserveSweep 1.005.804 375.014 3.125 1.383.943
ArbitrageRebates 45.817 2.559 31,970 80.347
FederalCapitalizationGrants 16.760.762 6.503.192 23.263.954
TotalOtherFinancingSources $0 $66.995
OTHERFINANCINGUSES
BondPnncipal $825,000
Bondinterest 1.063.079
BondsCostof 155.627
ArbitrageTaxes 84,166
OperatingTransfersOut
DebtServiceSweep 906,175
DebtServiceTransfertoBANFund 50.000
Ongmation/AdministratjveFeesTransfer 100.594 363.647
ArbitrageRebates
LoanLossReserveSweep 3.125
FederalCapitalizationGrants
TotalOtherFinancingUses $6,503,192 $1.579,456
Excess*deficiency)ofrevenuesandother
financingsourcesoven:under)expenditures
andotherfinancinguses $22,718,872 $0 $352,202 $9,578,649 $89,169 $250,884 $32,989,776
FundBalance•July1.2002 $93,266,625 $0 $15,310,057 $50,156,514 ($72,217) $7,839,358 $166,500,337
PnorYearandFederalRevenueAdjustments (5.664,290! (12,425,773) (3,946,662) (47.211) (6.122.575) [28.206,511)
FundBalance-June30.2003 $110321.207 $0 $3,236,486 $55,788,501 ($30,260) 51.967.667 $171,283,601
Theaccompanyingnotestothefinancialstatementsi iintegralpartofthisstatement
PageA-4