Audit Report State of Nevada Clean Water State Revolving Fund Program Financial Statements for Year Ended June 30, 2004


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OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Audit Report
State of Nevada Clean Water
State Revolving Fund Program
Financial Statements for
Year Ended June 30, 2004
Report No. 2006-1-00024
January 23, 2006

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Abbreviations
CAFR	Comprehensive Annual Financial Report
EPA	U.S. Environmental Protection Agency
FASB	Financial Accounting Standards Board
GAAP	Generally Accepted Accounting Principles
GASB	Government Accounting Standards Board
NDEP	Nevada Division of Environmental Protection
OIG	Office of Inspector General
SRF	Clean Water State Revolving Fund

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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2006-1-00024
January 23, 2006
Why We Did This Audit
We performed this audit to
determine:
•	Whether the Nevada
Clean Water State
Revolving Fund
Program's (the Program)
financial statements were
fairly presented in all
material respects;
•	To what extent the
Program's internal
controls over financial
reporting could be relied
upon;and
•	Whether the Program
complied with applicable
laws and regulations.
Background
The requirement for audited
financial statements was
enacted to help ensure that the
Program had management
practices, systems, and
controls in place to provide
reliable information for
managing the Federally
funded program.
Catalyst for Improving the Environment
State of Nevada Clean Water
State Revolving Fund Program
Financial Statements for Year Ended June 30, 2004
What We Found
We rendered unqualified opinions on the Nevada Clean Water State
Revolving Fund Program financial statements for the year ended June 30,
2004, and Nevada's compliance with applicable laws and regulations.
We did not note any weaknesses in internal control that we consider to be
material.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2006/
20060123-2006-1-00024.pdf

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-7 2	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\	/	WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
January 23, 2006
MEMORANDUM
SUBJECT: Auditor's Report for the State of Nevada
Clean Water State Revolving Fund Program
Financial Statements for Year Ended June 30, 2004
Report No. 2006-1-00024
FROM: Michael A. Rickey /s/ 'JfUdad/l. "Rurfxy
Director for Assistance Agreement Audits
TO:	Wayne Nastri, Regional Administrator
EPA Region 9
San Francisco, CA
Attached is a copy of the subject audit we sent to the State of Nevada. The audit contains reports on
the financial statements, internal controls, and compliance requirements applicable to the State of
Nevada Clean Water State Revolving Fund program for the year ended June 30, 2004.
We issued an unqualified opinion on the financial statements and on the compliance requirements
applicable to the State of Nevada Clean Water State Revolving Fund program. In addition, we did
not note any matters involving the internal control system and operations that we consider to be
material weaknesses.
Since we did not have any compliance matters or costs questioned, we are closing the audit report on
issuance.
We have no objection to the release of this report to any member of the public upon request.
The report contains no confidential business or proprietary information. If you have any questions
or concerns, please contact Mr. William Dayton at (916) 498-6590 or Mr. Paul Felz
at (303) 312-6270.
Enclosure

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Table of Contents
At a Glance
Independent Auditor's Report		1
Statement of Net Assets		2
Statement of Revenues, Expenses, and Changes in Net Assets		3
Statement of Cash Flows		4
Notes to the Financial Statements		5
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards		15
Distribution 		18

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
i A
OFFICE OF
INSPECTOR GENERAL
Independent Auditor's Report
We have audited the accompanying financial statements of the State of Nevada Clean Water
State Revolving Fund Program (the Program) as of and for the year ended June 30, 2004. These
financial statements are the responsibility of the Program's management. Our responsibility is to
express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the 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 disclosures 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 statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the financial statements referred to above are intended to present the
financial position, and the changes in financial position and cash flows, where applicable, of the
Program. They do not purport to, and do not, present fairly the financial position of the State of
Nevada as of June 30, 2004, and the changes in its financial position and its cash flows, where
applicable, for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Program, as of June 30, 2004, and the changes in financial position
and cash flows, where applicable, thereof for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Office of Inspector General
July 22, 2005
1

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State of Nevada
Clean Water State Revolving Fund Program
Statement of Net Assets
As of June 30, 2004
Assets
Current Assets:

Cash and cash equivalents
$ 92,631,798
Loan interest receivable
1,939,217
Investment interest receivable
120,043
Loans receivable - current portion
6,611,526
Due from EPA
41.711
Total current assets
101,344,295
Loans receivable - long term portion
114,629,921
Unamortized cost of bond issuance
308,839
Total assets
216.283.055
Liabilities and Net Assets

Current Liabilities:

Due to other funds
$50,045
Bond interest payable
2,121,422
Bonds payable - current portion
3,215,000
Arbitrage rebate payable
3.300
Total current liabilities
5,389,767
Bonds payable - long term portion
107,195,147
Net assets:

Restricted for revolving loan program
103.698.141
Total net assets
103,698,141
Total liabilities and net assets
$ 216.283.055
2

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State of Nevada
Clean Water State Revolving Fund Program
Statement of Revenues, Expenses, and Changes in Net Assets
For the Year Ended June 30, 2004
Revenues:
Interest on loans	$ 4,046,043
Interest on investments	1,497,625
EPA administrative reimbursements	271.706
Total revenues	5,815,374
Expenses:
Bond interest	3,965,400
Amortization of bond issue costs	21,758
Administrative costs:
Salaries and benefits	182,284
Operating costs	97,828
Indirect costs	45.936
Total Expenses	4,313,206
Operating income	1,502,168
Non-operating income
EPA contributions	3,086,955
Change in net assets	4,589,123
Net assets, beginning of year	99,109,018
Net assets, end of year	$103.698.141
3

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State of Nevada
Clean Water State Revolving Fund Program
Statement of Cash Flows
For the Year Ended June 30, 2004
Cash flows from operating activities:
Loan disbursements	$(12,681,391)
Interest receipts from borrowers	3,834,094
Principal repayments from borrowers	5,135,285
Investment interest	1,507,714
Transfer from Treasurer	679,535
Transfer out for administrative costs	(321,335)
EPA grants for administrative costs	265.447
Net cash used by operating activities	(1,580,650)
Cash flows from noncapital financing activities:
Grants from EPA	3,086,955
Bond proceeds	67,745,954
Bond principal repayments	(3,040,000)
Bond interest payments	(2.985.607)
Net cash provided by noncapital financing activities	64,807,301
Net increase in cash	63,226,651
Cash and cash equivalents, beginning of year	29.405.148
Cash and cash equivalents, end of year	$92.631.798
Reconciliation of operating income to net cash provided by operating activities:
Operating income	$ 1,502,169
Adjustments to reconcile operating income to net cash used by operating activities:
Amortization of cost of issuance	21,758
Interest on bonds	3,965,400
Change in assets and liabilities:
(Increase) in loan interest receivable	(211,949)
Decrease in investment interest receivable	10,089
(Increase) in amount due from EPA	(6,259)
Decrease in amount due from Treasurer	679,535
(Increase) in loans receivable	(7,546,106)
Increase in obligations to other funds	4.713
Total adjustments	(3,082,819)
Net cash (used) by operating activities	$ fl.580.650)
4

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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
1. Organization of the Fund
The Nevada Clean Water State Revolving Fund Program (the Program) was established
pursuant to Title VI of the Federal Water Quality Act of 1987, the Clean Water Act
(CWA), and the Nevada Revised Statutes 445A.060. The purpose of the State Revolving
Fund (SRF) is to provide low interest loans to local governments for constructing
wastewater treatment facilities and non-point source projects. The loan repayment period is
normally twenty years, and all repayments, including interest and principal, must be
credited to the SRF.
The Program was capitalized by a series of grants from the U.S. Environmental Protection
Agency (EPA) starting in 1989. The State is required to provide an additional 20 percent of
the Federal capitalization grant amount as matching funds in order to receive the grant from
EPA. As of June 30, 2004, EPA awarded $102,257,800 in capitalization grants to the State,
and the State is required to provide $20,451,560 to the Program as its matching share. The
state match is provided by state bonds issued on behalf of the Program by the State
Treasurer's Office.
The SRF Program is administered by the State of Nevada's Department of Conservation
and Natural Resources, Division of Environmental Protection (NDEP) through the Bureau
of Water Pollution Control (the Bureau). The Bureau has developed policies and
procedures for the loan program to meet the objectives of the State and Federal Acts and to
properly manage and coordinate the Program. The Bureau determines the level of funding
to be contributed to the loan fund and used for loans. The Bureau's primary responsibilities
for the SRF include obtaining capitalization grants from EPA, soliciting potential interested
parties for loans, negotiating loan agreements with local communities, reviewing and
approving payment requests from loan recipients, monitoring the loan repayments and
conducting inspection and engineering reviews to ensure compliance with all applicable
laws, regulations, and program requirements.
The Bureau has one full-time employee and numerous part-time staff to work on Program
activities. The allocated portion of salaries and benefits of employees for time spent
working on Program activities, as well as indirect costs based on payroll costs, are charged
to the Program. NDEP staff charge the Program for time spent on SRF activities, and the
Program reimburses NDEP for such costs in the following month. The charges include the
salaries and benefits of the employees, as well as indirect costs allocated to the Program.
Employees charging time to the Program are covered by the benefits available to Nevada
State Employees.
The Program financial statements, footnotes, and related schedules are presented for the
EPA. The Program's account balances and activities are included in Nevada's
Comprehensive Annual Financial Report (CAFR) as part of the Water Projects Loan Fund,
a major enterprise fund which uses the accrual basis of accounting. Because the Program is
blended with other water pollution control programs, its assets, liabilities, equity and
activities are not identifiable in Nevada's CAFR. Also, because of the different
5

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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
1. Organization of the Fund (continued)
reporting methods, there may be differences between the amounts reported in these
financial statements and Nevada's CAFR.
2. Summary of Significant Accounting Policies
Basis of Accounting
The program presents its financial statements as an enterprise fund. This method follows
the accrual method of accounting, whereby revenues are recorded as earned and expenses
are recorded when the liability is incurred. All assets and liabilities associated with the
operations of the Program are included in the statement of net assets. An enterprise fund is
used since the Program's operations are similar to a financing institution where net income
and capital maintenance are appropriate determinations of accountability that provide
information to the EPA in evaluating whether the Program is operating with the
requirements of the Clean Water Act. In preparing the Program's financial statements,
Nevada follows the accounting pronouncements of the Governmental Accounting
Standards Board (GASB), as well as statements issued by the Financial Accounting
Standards Board (FASB) before November 30, 1989, unless FASB pronouncements
conflict with or contradict GASB pronouncements.
Cash and Cash Equivalents
The Nevada State Treasurer is an elected Constitutional Officer and part of the Executive
Branch of the State government. The Treasurer is responsible for the handling of all State
cash as a fiscal agent for the owning fund as discussed in Note 3. The Treasurer manages
an investment pool where all temporary surplus cash is invested. The investment pool has
the same general characteristics as demand deposit accounts. Invested funds are considered
to be cash equivalents. Management of the Program does not have control over the
investment of excess cash, and the statement of cash flows considers all funds deposited
with the Treasurer to be cash and cash equivalents, regardless of actual maturities of the
underlying investments. Deposits with the Treasurer are accounted for on the statement of
net assets as cash and cash equivalents at their fair value. Investment interest earnings on
these deposits are received by the Program on a quarterly basis.
Loans Receivable
Nevada operates the Program as a direct loan program, whereby the majority of loans made
to waste water treatment facilities are funded by the Federal capitalization grant and/or
match from State funds. Additional loans are made from revolving funds that have been
repaid to the Program, from Program earnings and from leveraged funds. The Program's
loans are evidenced by a formal loan contract between the Division and the borrower. Loan
funds are disbursed to borrowers after they incur costs for the purposes of the loan, request
reimbursement from the Program, and the Program receives the Federal share from EPA.
6

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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
2. Summary of Significant Accounting Policies (continued)
Interest rates are based on the Bond Buyer Municipal Index which is published on a weekly
basis each Friday, and currently range from 3.1 to 4.0 percent over a term of 20 years. In
determining the interest rate that is offered to a loan recipient, the rate of interest as
published by the Bond Buyer Municipal Index on the Friday preceding the date of is
multiplied by a percentage, which is currently 62.5%. Interest is accrued and payable
during the construction period. After the final loan disbursement has been made, the loan
and agreement amounts are adjusted for the actual amounts disbursed.
No provision for doubtful accounts has been made as all loans are current, and management
believes that all loans will be repaid according to the loan terms.
Bonds Payable
The State issues water pollution control bonds to meet its state match obligation. The State
has also issued additional leveraged bonds to accelerate financing certain projects beyond
amounts made available by the Federal capitalization grants. Bond discounts, premiums
and costs of issuing the bonds are amortized over the life of the bonds. All bonds are
backed by the full faith and credit of the State of Nevada, for which the Program is
primarily responsible for repayment.
Capitalization Grants
In accordance with generally accepted accounting principles (GAAP), funds received from
the EPA for the capitalization of the Program are recorded as non-operating income when
received by the State Treasurer's Office.
3. Cash and Cash Equivalents
All monies in the Program are deposited with the State Treasurer's Office and are
considered to be cash. The Treasurer is responsible for maintaining and investing the
pooled cash balances in accordance with Nevada State laws. The Treasurer is required to
maintain a mix of investments in order to allow funds to be withdrawn at any time to meet
normal operating needs. The Program's share of the investment income is based on the
average daily balance for the period and is credited to the Program quarterly. Details of the
investments can be obtained from the State Treasurer's Office.
All cash and investments are stated at fair market value. Investments held by the State
Treasurer's Office are not categorized because they are not evidenced by securities that
exist in physical or book entry form.
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
3. Cash and Cash Equivalents (continued)
Carrying Market
Amount Value
Not subject to categorization:
Consolidated Cash Pool $ 92,631,798 $ 92,631,798
4. Loans Receivable
The Program makes loans to qualified entities for projects that meet the eligibility
requirements of the Clean Water Act. Loans are financed by capitalization grants, state
match, interest earnings, revolving funds and leveraged funds. Interest rates on the loans
are based on 62.5 percent of the Bond Buyers Index rate and vary between 3.1 and 4.0
percent. Loan maturities are 20 years. Semiannual payments are due on January 1st or July
1st. Interest during the construction period is calculated from the date funds are advanced
until the final loan closing. The loan contract requires the communities to issue local bonds
to secure the loan amount that the State has pledged as collateral for bonds payable.
The Program has issued loans for constructing wastewater treatment facilities and for non-
point source projects. From inception of the program, three local agencies have had
existing loans with a total of $24,195,381 refinanced by the Program at lower interest rates.
There are six loan contracts that are funded with approximately $85 million in leveraged
funds. In addition, the Program has issued one non-point source loan for approximately $6
million.
Details of loans receivable as of June 30, 2004:
Authorized
Loan
Amounts
Completed projects $ 159,380,299
Projects in progress 60.653.205
Totals $ 220,033,504
Amount
Disbursed
$ 145,856,210
10.985.889
$156,842,099
Principal
Paid
$ 35,600,652
$ 35,600,652
Outstanding
Balance
$ 110,255,558
10.985.889
$ 121,241,447
Less amounts due within one year
Non-current loans receivable, June 30, 2004
(6.611.526")
$ 114.629.921
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
4. Loans Receivable (continued)
Loans mature at various intervals through January 1, 2025. The scheduled principle
repayments for completely disbursed loans in subsequent years are as follows:
Year ending June 30:	Amount
2005	$ 6,581,160
2006	7,203,247
2007	7,468,638
2008	7,743,899
2009	8,029,400
2010-2014	40,442,882
2015-2019	24,473,792
2020-2024	8,258,684
2025	53.856
$110.255.558
Loans to Major Local Agencies:
As of June 30, 2004, the Program made loans to six local agencies with contract amounts in
excess of $5 million, and principal balances in the aggregate that exceed $97 million. The
outstanding principal balances of these loans represent approximately 80 percent of the
total loans receivable, as follows:
Borrower
City of Henderson
City of Sparks
Carson City
Washoe County
City of Mesquite
City of Reno
Total loans to major agencies
Loan Amount
$ 41,436,491
37,014,488
10,620,000
32,284,137
7,880,000
46.523.205
$ 175.758.321
Outstanding Balance
$ 24,443,703
28,112,907
8,326,690
28,317,546
5,299,267
2.592.139
$ 97.092.252
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
5. Bonds Payable
The State provides the required matching funds through state match bonds. As of June 30,
2004, $24,530,000 in such bonds had been issued. As of June 30, 2004, $4,308,905 in state
match bond funds were available to match EPA funds. The State also issues leveraged
bonds for financing selected projects that exceed the amount of available funding. As of
June 30, 2004, $113,175,000 in leveraged bonds had been issued, of which $16,477,991
was available for future projects.
In May 2001, the State defeased $3,170,000 of older state match bonds and $8,875,000 of
leveraged bonds in an advanced refunding to take advantage of lower interest rates. These
bonds were refunded in the 2001A1 series issued for $28,720,000. The refunding portion of
the proceeds of the new bond were placed in an irrevocable trust to provide for all future
debt service payments on the old bonds. Accordingly, the trust account assets and the
liability for the defeased bonds are not included in the Program's financial statements. In
accordance with generally accepted accounting principles, the deferred amount was
reported as a deferred charge and is amortized over the remaining life of the refunded debt.
This amount is deducted from the outstanding balance of the 2001A1 bonds for financial
statement presentation. The remaining amount of defeased debt at June 30, 2004 is
$11,235,000.
Details of bonds payable as of June 30, 2004 are as follows:
State Match Bonds:
Balance Current Long-term
Series September 1, 1995A, General
Obligation Water Pollution Control
Revolving Fund Matching Bonds,
interest of 4.0% to 5.1% due semi
annually, principal due annually to
February 1,2005. $ 90,000 $ 90,000 $ 0
Series July 1, 1998D, General Obligation
Water Pollution Control Revolving Fund
Matching Bonds, interest of 4.25% to
4.875%) due semiannually, principal due
annually to August 1,2013. 2,310,000 200,000 2,110,000
Series September 1, 1999C, General
Obligation Water Pollution Control
Revolving Fund Match Bonds, interest of
5.25%) to 5.3%o due semiannually,
principal due annually to August 1, 2012. 1,020,000 100,000 920,000
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
5. Bonds Payable (continued)
Balance	Current	Long-term
Series July 1, 2000C, General
Obligation Water Pollution Control
Revolving Fund Matching Bonds,
interest of 5% to 5.25% due
semiannually, principal due annually
to August 1,2011.	1,110,000	115,000	995,000
Series May 1, 2001 B, General Obligation
(Limited Tax) Water Pollution Control
Revolving Fund Matching and Refunding
Bonds, interest of 4% to 4.7% due
semiannually, principal due annually to
August 1,2013.	3,800,000	735,000	3,065,000
Series November 25, 2003G, General
Obligation Water Pollution Control
Revolving Fund Match Bonds, interest of
2.00% to 4.00%) due semiannually,
principal due annually to August 1, 2013. 2.665.000	235.000	2.430.000
Total State match bonds payable: 10,995,000	1,475,000	9,520,000
Leveraged Bonds:
Series September 1, 1995B, General Obligation
Water Pollution Control Revolving Fund
Leveraged Bonds, interest of 4.2%> to
7.0%) due semi-annually principal due
annually to February 1,2005.	455,000	455,000	0
Series May 1, 1996B, General Obligation
Water Pollution Control Revolving Fund
Leveraged Bonds, interest of 3.75%> to
5.15%o due semi-annually principal due
annually to August 1,2016.	570,000	180,000	390,000
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
5. Bonds Payable (continued)
Balance	Current Long-term
Series May 1, 2001 A-1, General Obligation
(Limited Tax) Water Pollution Control
Revolving Fund Leveraged and Refunding
Bonds, interest of 4% to 5% due
semi-annually, principal due annually to
August 1,2019.	27,210,000	800,000	26,410,000
Series May 1, 2001A-2, General
Obligation (Limited Tax) Water Pollution
Control Revolving Fund Leveraged
Bonds, interest of 6% to 6.5% due
semiannually, principal due annually to
August 1,2017.	6,455,000	305,000	6,150,000
Series November 25, 2003H, General
Obligation (Limited Tax) Water Pollution
Control Revolving Fund Leveraged
Bonds, interest of 3.0% to 5.0% due
semiannually, principal due annually to
August 1,2023.	63.500.000		0	63.500.000
Total Leveraged bonds payable	98,190,000	1,740,000	96,450,000
Total State match and leveraged bonds 109,185,000	3.215.000	105.970.000
Bond premiums and discounts	1.422.329
Total bonds payable	$ 110.607.329	$3.215.000 $ 107.392.329
The debt service requirements to maturity, excluding unamortized premium and discounts,
are as follows:

Principal
Interest
Total
2005
$ 3,215,000
$ 5,034,259
$ 8,249,259
2006
3,275,000
4,877,031
8,152,031
2007
5,780,000
4,676,613
10,456,613
2008
5,815,000
4,405,081
10,220,081
2009
5,815,000
4,124,088
9,939,088
2010-2014
31,275,000
16,613,556
47,888,556
2015-2019
29,105,000
9,379,663
38,484,663
2020-2024
24.905.000
2.443.991
27.348.991
Totals
$109,185,000
$51.554.282
$160,739,282
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
6. Arbitrage Rebate
In accordance with Internal Revenue Code Section 148(f) relating to arbitrage restrictions
on tax-exempt bonds, an arbitrage rebate payable in the amount of $3,300 has been
recorded for the Series 1999C state match bond issue, which is due and payable on
November 28, 2004.
7. Interfund transfers
All administrative costs of the Program are initially paid by the Agency's general fund
accounts. EPA grants directly reimburse those accounts for 83.33% of these costs, and the
remaining balance is paid from the SRF fund through quarterly interfund transfers.
Amounts due to other funds represent administrative costs incurred by general fund
accounts for Program expenditures which are payable at June 30, 2004. The program
recognizes the EPA contributed revenue as a reduction of current liabilities at the time the
grant portion is received by the Agency.
8. Contributed Capital and Fund Balance
The Program is capitalized by EPA grants authorized by the Clean Water Act. All EPA
funds drawn for loans are recorded as non-operating revenues from EPA. The State of
Nevada is responsible for matching 20 percent of the EPA capitalization grants and this
obligation is met by issuing state match bonds, which are repaid from loan interest receipts
(discussed under Note 5). As of June 30, 2004, EPA has awarded capitalization grants of
$102,257,800 to the State, of which $82,633,851 has been drawn for loans and
administrative expenses.
The following summarizes the EPA capitalization grants awarded, amounts drawn on each
grant as of the balance sheet date, and balances available for future draws:
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State of Nevada
Clean Water State Revolving Fund Program
Notes to Financial Statements
June 30, 2004
8. Contributed Capital and Fund Balance (continued)
Cumulative	Cumulative Grant Funds

Grant
Draws as of

Draws as of
Available

Amount
June 30, 2003
2004 Draws
June 30, 2004
June 30, 2004
1989
$ 4,577,200
$ 4,577,200

$ 4,577,200
$ 0
1990
4,738,000
4,738,000

4,738,000
0
1991
10,074,800
10,074,800

10,074,800
0
1992
9,534,900
9,534,900

9,534,900
0
1993
9,431,000
9,431,000

9,431,000
0
1994
5,813,800
5,710,832
$ 102,968
5,813,800
0
1995
6,007,800
5,807,540
162,479
5,970,019
37,781
1996
9,904,700
9,574,544

9,574,544
330,156
1997
2,990,500
2,404,532
486,285
2,890,817
99,683
1998
6,577,300
5,929,265
428,792
6,358,057
219,243
1999
6,577,900
6,358,637

6,358,637
219,263
2000
6,555,200
4,973,560
560,890
5,534,450
1,020,750
2001
6,496,100
166,639
1,610,988
1,777,627
4,718,473
2003
6,510,800



6,510,800
2004
6,467,800



6,467,800
Totals $ 102,257,800 $79,281,449 $ 3,352,402 $ 82,633,851 $ 19,623,949
9. Contingencies
The Program is exposed to various risks of loss related to torts, thefts of assets, errors or
omissions, injuries to state employees while performing Program business, or acts of God.
The State maintains insurance for all risks of loss that is included in the indirect costs
allocated to the Program. There have not been any claims against the Program since its
inception in 1989.
10. Related Parties
There are no related party transactions with or related to amounts receivable from
management of the Nevada State Division of Environmental Protection Clean Water State
Revolving Fund Program.
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Independent Auditor's Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
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(3
b
2
LU
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
We have audited the financial statements of the State of Nevada Clean Water State Revolving
Fund Program (the Program) as of and for the year ended June 30, 2004, and have issued our
report thereon dated July 22, 2005. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the Program's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and not to provide an opinion on the internal control
over financial reporting. Our consideration of the internal control over financial reporting
would not necessarily disclose all matters in the internal control that might be material
weaknesses. A material weakness is a reportable condition in which the design or operation of
one or more of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud in amounts that would be material in relation
to the financial statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We noted no
matters involving the internal control over financial reporting and its operation that we
consider to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. This included
tests of specific program requirements governing allowability for specific activities, allowable
types of assistance, State matching, period of availability of funds and binding commitments,
cash management, program income, and subrecipient monitoring that are applicable to the
Program for the year ended June 30, 2004.
The management of the Program is responsible for the Program's compliance with those
requirements. Our responsibility is to express an opinion on those requirements based on our
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audit. An audit includes examining, on a test basis, evidence about the Program's compliance
with those requirements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Program complied, in all material respects, with the specific program
requirements that are applicable to the Program for the year ended June 30, 2004.
This report is intended solely for the information and use management of the Program and the
U.S. Environmental Protection Agency, and is not intended to be and should not be used by
anyone other than these specified parties.
Office of Inspector General
July 22, 2005
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Distribution
EPA Region 9
Regional Administrator
Director, Water Division
State Revolving Fund Coordinator
Audit Followup Coordinator
EPA Headquarters
Director, Grants Administration Division
Director, Financial Management Division
Director, Office of Grants and Debarment
Agency Followup Coordinator
State Revolving Fund Audit Manager
State Revolving Fund Branch, Office of Water
State of Nevada
Division of Environmental Protection, Nevada Department of Conservation
and Natural Resources
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