^osr„,	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
**.	WASHINGTON, D.C.
¦¦ Z
\	I	OFFICE OF
\	/	INSPECTOR GENERAL
proi^
May 26, 2004
Memorandum
Subject:	Final Auditor's Report for the State of Washington Water Pollution
Control Revolving Fund For The Year Ended June 30, 2003
Audit Report No. 2004^-00067 ,
From:	William
National SRF Audit Manager	Q
To:	John lani
Regional Administrator
EPA, Region 10
Seattle, Washington
Attached is a copy of the subject audit report we sent to the State of Washington. The audit contains
reports on the financial statements, internal controls, and compliance applicable to the State Revolving Fund
(SRF) program in Washington.
We have issued an unqualified opinion on the financial statements and compliance requirements, and
noted no matters involving the internal control system and operations that we consider to be material
weaknesses.
We did not have any compliance matters or costs questioned, and we are closing the audit report on
issuance.
Please call me at (916) 498-6590 or Darren Schorer at (206) 553-6288 should you have any comments or
questions.
Attachment

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^osr„,	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
**.	WASHINGTON, D.C.
¦¦ Z
\	I	OFFICE OF
\	/	INSPECTOR GENERAL
proi^
May 26, 2004
Ms. Nancy Stevenson, Chief Financial Officer
State of Washington, Department of Ecology
P.O. Box 47600
Olympia, WA 98504-7600
Subject:	Final Report of Audit of Financial Statements of the State of Washington Water Pollution
Control Revolving Fund for the year ended June 30, 2003
EPA Audit Report No. 2004-1-00067
Dear Ms. Stevenson:
Enclosed please find an electronic copy of the final audited financial statements for the State of Washington
Water Pollution Control Revolving Fund (the Fund) for the year ended June 30, 2003. The purpose of our
audit was to:
Examine the financial statements of the State of Washington Water Pollution Control
Revolving Fund for the year ended June 30, 2003, and issue a report containing our
opinion of the financial statements;
Report on the internal control structure of the Washington Water Pollution Control
Revolving Fund program;
Report on compliance with specific program requirements of the Washington Water
Pollution Control Revolving Fund program.
We have issued an unqualified opinion on the financial statements and an unqualified opinion on the
compliance requirements. In our report on internal controls, we noted no matters involving the internal
control structure and its operations that we considered to be a material weakness. We discussed these
reports with your program management who generally agreed with the results of our audit.
We would like to thank you and your staff for the cooperation and courtesies we received during our audit.
If you have any questions or concerns, please contact me at (916) 498-6590 or Darren Schorer at (206)
553-6288.
Wlliam M. Dayton U
National SRF Audit Manager

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i Q I OIG
/ OFFICE OF INSPECTOR GENERAL
V. ,-<-c
Ca talyst for Improving die Environment
Audit Report
State of Washington
Water Pollution Control State Revolving Fund
Financial Statements with
Independent Auditor's Report, June 30, 2003
Audit Report Number 2004-1-00067
Issued May 26, 2004

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Inspector General Division
Conducting the Audit:
Region Covered:
Program Office Involved:
Western Audit Division
San Francisco, California
Region 10
Water Management Division

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State of Washington
Water Pollution Control State Revolving Fund
Table of Contents
Independent Auditor's Report 	1
Statement of Net Assets	2
Statement of Revenues, Expenses and Changes in Fund Net Assets	3
Statement of Cash Flows 	4
Notes to the Financial Statements 	5
Independent Auditor's Report on the Internal Control Structure Based on an
Audit of the Financial Statements Performed In Accordance with
Government Auditing Standards 	12
Independent Auditor's Report on Compliance with the Requirements Applicable to the Environmental
Protection Agency's State Revolving Fund Program in Accordance with
Government Auditing Standards 	14

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^60 S Ta
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
OFFICE OF
INSPECTOR GENERAL
Independent Auditor's Report
To: Nancy Stevenson
Chief Financial Officer
Washington State Department of Ecology
State of Washington
We have audited the accompanying statement of net assets of the Washington Department of Ecology Water Pollution Control
State Revolving Fund Program (the Program) as of June 30, 2003, and the related statements of revenues, expenses and
changes in fund net assets, and cash flows for the year then ended. These financial statements are the responsibility of the
Program's management. Our responsibility is to express an opinion 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
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.
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial
position of the Washington Department of Ecology Water Pollution Control State Revolving Fund as of June 30, 2003 and the
results of its operation and its cash flows for the year then ended in conformity with accounting principles generally accepted in
the United States.
As discussed in Note 1, the financial statements referred to above are intended to present the financial position and results of
operations of the Washington Department of Ecology Water Pollution Control State Revolving Fund, a component fund of the
State of Washington. These statements are not intended to present the financial position or results of operations for the State of
Washington or the Washington Department of Ecology, in conformity with accounting principles generally accepted in the United
States, of which the Water Pollution Control Revolving Fund is a part.
In accordance with Government Auditing Standards, we have also issued a report, dated February 27, 2004, on our
consideration of the Washington Department of Ecology Water Pollution Control State Revolving Fund's internal control
structure and a report dated February 27, 2004 on its compliance with laws and regulations. Those reports are integral parts of
an audit prepared in accordance with auditing standards generally accepted in the United States of America and should be read
		'' nsidering the results of our audit.
Office of the InspectorjQeneral
Environmental Protection Agency
February 27, 2004

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Statement of Net Assets
June 30, 2003
With Unaudited Comparative Totals for 2002
(in thousands)
Assets
Current assets:
Cash and cash equivalents
Receivables:
Due from Federal government
Interest on SRF loans
Interest on investments
Total receivables
Current maturities of SRF loans
Total current assets
Loans receivable, net of current maturities
Total assets
June 30,
2003
$ 130,012
158
1,287
284
1,729
15.004
146,745
270,546
417,291
Unaudited
June 30,
2002
$ 129,167
109
1,301
311
1,721
13.587
144,475
231,229
375,704
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable and accrued expenses
Due to other Funds
Construction costs payable
Total current liabilities
Net assets:
Restricted
Total liabilities and net assets
60
25
381
466
62
34
1.938
2,034
416,825
373,670
$ 417.291
$ 375.704
The accompanying notes are an integral part of these financial statements.
2

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Statement of Revenues, Expenses and Changes in Fund Net Assets
For the year ended June 30, 2003
With Unaudited Comparative Totals for 2002
(in thousands)
Unaudited
June 30,	June 30,
2003	2002
Operating Revenues:
Interest income on SRF loans $ 6,677	$ 7,973
Operating Expenses:
Salaries and benefits 712	724
Supplies 29	26
T ravel 13	9
Indirect Costs 248	263
Contracts		496 	228
Total operating expenses 	1,498	1,250
Operating income (loss)	5,179	6,723
Nonoperating Revenue (Expenses)
Interest on investments	3,375	4,193
Funds received from EPA	28,855	16,439
Fund received from State of Washington 	5,746	3,284
Total nonoperating revenue	37,976	23,916
Change in net assets	43,155	30,639
Net assets, beginning of year	373,670	343,031
Net assets, end of year	$ 416,825 $ 373,670
The accompanying notes are an integral part of these financial statements.
3

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Combined Statement of Cash Flows
For the year ended June 30, 2003
With Unaudited Comparative Totals for 2002
(in thousands)


June 30,
2003
Unaudited
June 30,
2002
Cash flows from operating activities:
Receipts from customers
Payments to employees and suppliers
$
7,242
(1,526)
$ 11,731
(1,222)
Net cash provided by operating activities

5,716
10,509
Cash flows from noncapital financing activities:
Funds received from EPA
Transfer from other State funds

28,805
5,746
16,416
3,284
Net cash provided (used) by noncapital financing activities

34,551
19,700
Cash flows from investing activities:
Receipt from interest on investments
Loan Disbursements
Repayment of loans

3,402
(68,674)
25,850
4,148
(32,619)
58,497
Net cash provided (used) by investing activities

(39,422)
30,026
Net cash provided (used)

845
60,235
Cash and cash equivalents, beginning of year

129,167
68,932
Cash and cash equivalents, end of year
$
130,012
$ 129,167
Reconciliation of operating income (loss) to net
cash provided (used) by operating activities
Excess of revenue over expenses
(Increase) decrease in loan interest receivable
Increase (decrease) in A/P and other liabilities
Increase (decrease) in deferred interest
Net cash used by operating activities
$
$
5,179
14
(28)
551
5,716
$ 6,723
1,215
28
2,543
$ 10,509
The accompanying notes are an integral part of these financial statements.
4

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
1. Organization of the Fund
Washington's Water Pollution Control Revolving Fund (the Fund) was established pursuant to Title VI of the
Federal Water Quality Act of 1987 (the Act). The Act established the State Revolving Fund (SRF) program
to replace the construction grants program. The SRF provides loans at reduced interest rates to finance
the entire cost of qualified projects for the construction of publicly owned water pollution control facilities,
nonpoint source pollution control projects, and development of estuary conservation and management
plans. Loans made by the Fund must be repaid within 20 years, and all repayments, including interest and
principal, must be credited to the Fund.
The fund was capitalized by a series of grants from the U.S. Environmental Protection Agency (EPA)
starting in 1989. State's are 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, 2003, EPA awarded
approximately $342,068 in capitalization grants to the State, and the State is required to provide $68,414 to
the Fund as its matching share. The State match is transferred to the Fund from the State's Centennial
Clean Water Fund at the time of the cash draw.
The Fund is administered by the Washington State Department of Ecology (WDOE) through the Water
Quality Program Office (the Program). The Program's primary responsibilities for the SRF includes
obtaining capitalization grants from EPA, soliciting potential interested parties, negotiating loan agreements
with local communities, reviewing and approving payment requests from loan recipients, managing the loan
repayments, and conducting inspection and engineering reviews to ensure compliance with all applicable
laws, regulations, and program requirements.
The Fund does not have any full time employees. WDOE charges the Fund for time spent on SRF
activities by its employees, and the Fund reimburses WDOE 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 Fund
based on direct salary costs. Employees charging time to the Fund are covered by the benefits available
to Washington State Employees. The Fund is also charged indirect costs through the cost allocation plan
for general state expenses.
The Fund is included in the Washington's general purpose financial statements as a special revenue fund,
which uses the modified accrual basis of accounting. Due to differences in reporting methods, there may
be differences between the amounts reported in these financial statements and the general purpose
financial statements.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements for the Fund are presented as a special revenue fund which uses the accrual
basis of accounting whereby revenues are recorded as earned and expenses are recorded when the
liability is incurred. The State has elected to follow the accounting pronouncements of the Governmental
Accounting Standards Board (GASB), as well as statements issued by the Financial Accounting Standards
Board on or before November 30, 1989, unless the pronouncements conflict with or contradict GASB
pronouncements.
5

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
2. Summary of Significant Accounting Policies (continued)
Cash and Cash Equivalents
All moneys of the Fund are deposited with the State Treasurer's Office, and are considered cash.
According to State law, the Treasurer is responsible for maintaining the cash balances and investing
excess cash of the Fund. Consequently, management of the Fund does not have any control over the
investment of the excess cash. The statement of cash flows considers all funds deposited with the
Treasurer to be cash or cash equivalents, regardless of actual maturities of the underlying investments.
Loans Receivable
WDOE operates the Fund as a direct loan program which makes loans to communities through funding
by the Federal capitalization grant for 83.3 percent of the loan amount, and funding by State matching for
16.7 percent of the loan amount. Loan funds are disbursed to the local agencies after they expend funds
for the purposes of the loan and then request reimbursement from the Fund. Interest is calculated from
the date the funds are disbursed. After the final disbursement, the loan amount and repayment schedule
are adjusted for actual funds disbursed and interest accrued during the project period. No provision for
uncollectible accounts has been made as all loans are current, and management believes that all loans will
be repaid according to the loan terms.
Contributed Capital
In accordance with generally accepted accounting principles (GAAP), funds received from EPA and
Washington State for the capitalization of the Fund are recorded as contributed capital, as discussed in
Note 5.
Reclassifications
Certain amounts in the 2002 unaudited financial statements have been reclassified to conform to the
presentation in the 2003 financial statements.
3. Cash and Cash Equivalents
All monies of the Fund are deposited with the State Treasurer's Office as part of the State's Treasury/Trust
Portfolio, and are considered cash. The Treasurer is responsible for maintaining and investing the pooled
cash balances in accordance with State laws. The Treasurer is required to maintain a mix of investment
portfolios in order to allow funds to be withdrawn at any time to meet normal operating needs without prior
notice or penalty. The Fund's proportionate share of the investment income, based on the average daily
balance for the period, is credited to the Fund monthly. The Treasurer charges all the funds of the State
categorized as treasury funds up to one percent of the average daily balance for administration costs.
As of June 30, 2003, total Treasurer's average daily invested balance of the Treasury/Trust Fund Portfolio
was $2.5 billion. Details of the investments can be obtained from the State Treasurer's Office.
All cash and investments are stated at cost, which approximates fair market value. Investments in local
government investment pools are not categorized because they are not evidenced by securities that exist
in physical or book entry form.
6

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
Cash and Cash Equivalents (continued)
Carrying	Market
Amount	Value
Not subject to categorization:
Treasury/Trust Portfolio	$ 130,012 $ 130,012
Loans Receivable
The Fund makes loans to qualified agencies for projects that meet the eligibility requirements of the Clean
Water Act. Loans are financed by capitalization grants, state matches and revolving funds. The interest
rate is established at 60 percent of the Bond Buyers Index for tax exempt municipal bonds for loans with
more than a five year term but no more than 20 years and 30 percent of the index for loans for up to five
years. For the year ended June 30, 2003, interest rates varied between 0.5 and 1.5 percent. The Fund
also makes zero interest rate loans for communities that can demonstrate financial hardship on residential
ratepayers in the form of sewer user fees. As of June 30, 2003, the Fund had made 125 zero interest
rate loans for approximately $127 million to communities with severe financial hardship. These numbers
do not include recipients with paid off loans. Loan repayments are required to start one year after project
completion. Details of loans receivable as of June 30, 2003, are summarized below:
Loans by Category:
Loans receivable by project status at June 30, 2003 are as follows:
Loan Remaining Outstanding
Authorized Commitment Balance
Completed projects	$ 362,181 $	0 $ 224,607
Projects in progress	120,368 62,572	60,943
Totals	$ 482.549 $ 62.572	285,550
Less amount due within one year	15,004
Loans receivable, June 30, 2003	$ 270,546
Loans mature at various intervals. The scheduled minimum principle repayments on completely disbursed
loans in subsequent years are as follows:
Year ending June 30:	Amount
2004	$ 15,004
2005	13,391
2006	13,094
2007	13,118
2008	13,111
Thereafter	156,889
$ 224.607
7

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
4. Loans Receivable (continued)
Loans to Major Local Agencies:
As of June 30, 2003, the Fund made loans to the following 15 major local agencies. The aggregate
outstanding balance for each of these agencies exceeds $5 million. The outstanding balances of these
loans represent approximately 72 percent of the total loans receivable.

Authorized
Project
Loan


Loan
Period
Amount At
Outstanding
Aaencv
Amount
Interest
Completion
Balance
City of Burlington
$ 5,393
$ 478
$ 5,871
$ 5,281
City of Camas
9,292
720
10,012
9,065
City of Centralia
32,998
0
20,663
19,948
City of Kennewick
9,693
670
10,064
8,636
King Co. Department of




Nat. Resources
13,838
0
13,838
11,932
King Co. Wastewater




Treat. Division
14,207
0
14,207
13,878
City of Lynden
6,522
56
5,788
5,788
Mason County
12,732
53
12,785
7,364
City of Monroe
11,843
123
11,877
7,616
City of Olympia (LOTT)
36,580
0
36,580
25,401
City of Pasco
22,726
2,346
25,072
21,434
City of Puyallup
13,625
780
14,405
13,298
City of Snohomish
10,855
0
10,855
7,186
Spokane County
11,100
0
10,640
10,327
City of Walla Walla
13.780
830
14.610
12.734
Total
$225,184
$ 6.056
$ 216.812
$ 179.888
The loan amount at completion may not agree with the authorized loan amount plus capitalized project
period interest. Communities may elect to pay capitalized project period interest separately or add the
amount to the final loan amount. Further, the authorized loan amount is based on estimates, and final
project costs may be different than estimated.
5. Contributed Capital and Fund Balance
The Fund is capitalized by grants from EPA authorized by the Clean Water Act and by matching funds
from the State. All funds drawn are recorded as contributed capital from the EPA and Washington State.
As of June 30, 2003, EPA awarded capitalization grants of $342,068 to the State, of which $282,148 has
been drawn for loans and administrative expenses. The State has provided matching funds of $56,407.
The following summarizes the capitalization grant awarded, amounts drawn on each grant as of the
balance sheet date, and balances available for future loans:
8

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
5. Contributed Capital and Fund Balance (continued)



Draws
Draws

Available

Grant

June 30,
2003
June 30,
June 30,

Amount

2002
Draws
2003
2003
1989-1991
$ 70,278
$
70,278
$ 0
$ 70,278
$ 0
1992
33,789

33,789
0
33,789
0
1993
33,425

33,425
0
33,425
0
1994
20,740

20,740
0
20,740
0
1995
21,420

21,420
0
21,420
0
1996
22,509

22,509
0
22,509
0
1997
23,415

23,415
0
23,415
0
1998
23,417

23,097
320
23,417
0
1999
46,759

4,778
28,535
33,313
13,446
2001
23,132

0
0
0
23,132
2002
23.184

0
0
0
23.184
Totals
$ 342.068
$
253.451
$ 28.855
$ 282.306
$ 59.762
As of June 30, State matching contributions were:
2003
2002 Contribution	2003
Washington State Matching Contributions	$ 50,661 $ 5,746 $ 56,407
6. Contingencies and Subsequent Events
Contingencies
The Fund is exposed to various risks of loss related to torts, thefts of assets, errors or omissions, injuries
to state employees while performing Fund business, or acts of God.
The Fund maintains insurance for all risks of loss which is included in the indirect costs allocated to the
Fund. There have not been any claims against the Fund since its inception in 1989 and no contingencies
came to our attention during our audit which require disclosure or accrual under Statement of Financial
Accounting Standards No. 5.
9

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WASHINGTON DEPARTMENT OF ECOLOGY
Water Pollution Control State Revolving Fund
Notes to Financial Statements
6. Contingencies and Subsequent Events (continued)
Subsequent Events
No events occurred subsequent to the balance sheet date came to our attention which require adjustment
to, or disclosure in, the financial statements.
10

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Independent Auditor's Report on the
Internal Control Structure Based on an
Audit of the Financial Statements
Performed in Accordance with
Government Auditing Standards

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^osrv	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
** **	WASHINGTON, D.C.

O	£	OFFICE OF
%	INSPECTOR GENERAL
T>	XV
PROlfc
TO: Nancy Stevenson
Chief Financial Officer
Washington State Department of Ecology
State of Was h i n gto n
We have audited the financial statements of Washington Department of Ecology Water Pollution Control State Revolving Fund
Program (the Program) as of and for the year ended June 30, 2003, and have issued our report thereon dated February 27,
2004.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and
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 from material misstatement.
The management of the Washington Department of Ecology Water State Revolving Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling its responsibilities, estimates and judgements by management are required
to assess the expected benefits and related costs of internal control policies and procedures. The objectives of an internal
control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization
and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and
not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may
become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and
procedures may deteriorate.
In planning and performing our audit of the financial statements of the Washington Department of Ecology Water Pollution
Control State Revolving Fund for the year ended June 30, 2003, we obtained an understanding of the internal control structure.
With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures
and whether they have been placed in operation, and we assessed control risk 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 structure.
Accordingly, we do not express such an opinion.
Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control
over financial reporting that might be material weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a 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 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 structure and its operations that we
consider to be material weaknesses as defined above.
This report is intended for the information of management of the Washington Department of Ecology Water Pollution Control
State Revolving Fund and the United States Environmental Protection Agency. However, this report is a matter of public record
and distribution is not limited.
"fice of InspectorGeriferar
Environmental Protecfion Agency
February 27, 2004
12

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Independent Auditor's Report
on Compliance with Requirements Applicable to the
Environmental Protection Agency's
State Revolving Fund Program
in Accordance with
Government Auditing Standards

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
OFFICE OF
INSPECTOR GENERAL
TO: Nancy Stevenson
Chief Financial Officer
Washington State Department of Ecology
State of Was h i n gto n
We have audited the financial statements of the Washington Department of Ecology Water Pollution Control State Revolving
Fund Program (the Program) as of and for the year ended June 30, 2003, and have issued our report thereon dated February
27, 2004.
We have also audited the Program's compliance with requirements governing the following:
•	Allowability for Specific Activities;
•	Allowable Costs/Cost Principles;
•	Cash Management;
•	State Matching;
•	Period of Availability of Funds and Binding Commitments;
•	Program Income;
•	Reporting;
•	Sub-recipient Monitoring, and;
•	Special tests and provisions;
The above compliance requirements are applicable to the Washington Department of Ecology Water Pollution Control State
Revolving Fund Program for the year ended June 30, 2003. The management of the Program is responsible for it's compliance
with those requirements. Our responsibility is to express an opinion on those requirements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America; 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
material noncompliance with the requirements of the SRF program occurred. 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.
As part of obtaining reasonable assurance about whether the Washington Department of Ecology Water Pollution Control State
Revolving Fund's financial statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, and grants, noncompliance with which could have a direct and material effect on the
determination financial statement amounts. The results of our tests disclosed no instances of noncompliance that we are
required to report under Government Auditing Standards.
In our opinion, the Program complied, in all material respects, with the specific program requirements listed above for the year
ended June 30, 2003.
This report is intended for the information of management of the Program and the United States Environmental Protection
matter of public record and distribution is not limited.
Office of Inspector Gepgral
Environmental Protection Agency
February 27, 2004
14

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Report Distribution
EPA, Headquarters:
Director, Grants Administration
Agency Followup Coordinator
Associate Administrator for Congressional
and Intergovernmental Relations
Associate Administrator for Communications,
Education and Public Affairs
Infrastructure Branch Chief
CWSRF Coordinator
CWSRF Audit Manager
EPA, Region 10:
Regional Administrator
Office of Water and Watersheds
CWSRF Coordinator
Audit Follow-up Coordinator
State of Washington:
Department of Ecology

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