The Office of Inspector General, in a 24-page report released this month, said the state division approved loans with 30-year repayment terms when Clean Water Act guidelines allow no more than 20 years. The audit also found violations with the way the division processed funds, identified a revolving fund project that should have been paid for with state money and was critical of how the division monitors its own audits on communities that request $500,000 or more for projects.
"There are a lot of strings attached to state revolving fund money, and we didn't follow the strings exactly right," Ed Macauley, the division's revolving fund manager, said Tuesday.
However, he added that most of the violations were technical in nature, and said the audit would not harm the division's ability to qualify for federal funds.
"There's always a risk of losing federal funding if the audit's findings are significant," said Macauley. "These findings don't put us in that category, though if we fail to correct the findings in the future, it could become more serious."
State water quality officials agreed with most of the audit's findings and recommendations, save the 30-year loan issue. Macauley says DWQ went to the longer loan structure as a way to allow communities to repay loans for projects, without the division spending grant money to bridge the gaps. The division sought, and received permission to extend the terms from the Environmental Protection Agency's Region 8 office in Denver.
Macauley says state auditors, who surveyed the division at about the same time as federal officials, back DWQ in its claim.
"But the inspector general says Region 8 shouldn't have authorized it, and we're not allowed to do those kinds of loans," he added.
The federal audit took the Division of Water Quality to task for processing federal money earmarked for what is called the Hardship Fund through the revolving fund first. DWQ officials say the problem is essentially a computer glitch, and are currently figuring out how to fix it.
"Unfortunately, there's no easy fix for this," said Macauley."
jbaird@sltrib.com
