The Clean Water Act (CWA) requires an annual financial audit of the 51 state-level CWSRF programs. Each state and Puerto Rico conducts these audits according to the generally accepted accounting standards (GAAP) established by the Governmental Accounting Standards Board (GASB). States often define their CWRSF programs as ongoing enterprise funds under the GASB definitions of funds. 2018 Financial Highlights The CWSRF programs provided over $6.8 billion in funding for high priority water infrastructure and other water quality projects. Cumulatively, CWSRF programs have provided $133 billion in assistance, mainly in the form of low cost financing, to a wide range of eligible borrowers. Since 2009, approximately $4.2 billion has been provided as additional subsidy in the form of direct grants and principal forgiveness. Approximately $250 million was provided in 2018 alone. Total assets are approximately $72 billion. This represented a $1.5 billion increase from the previous year. Net assets have exceeded $51 billion. This is a $1.4 billion increase from the previous year. In 2018, federal contributions were over $1.2 billion. In 2018, operating revenues exceeded operating expenses by over $80 million. In 2018, earnings from loans and investments exceeded $1.3 billion. The CWSRF programs issued nearly $2 billion in leveraged bonds to provide additional funding for projects. National aggregate financial statements were developed using data entered in EPA's National Information Management System between July 1, 2017 and June 30, 2018. Because the 51 CWSRF programs are independent state-level entities, no nationally audited CWSRF program financial reports are available. The financial statements are non-audited, cash-based financial reports. The four statements are described below. Statement of Fund Activity (Page 2) Provides an overview of major indicators of fund activity, including capitalization grant levels, project commitments, project disbursements, and subsidies provided. Both annual and cumulative data are given. Statement of Revenues, Expenses, and Earnings (Page 3) Describes the overall performance of the CWSRF fund over the reporting period that is reflected in the increase or decrease in net assets. Statement of Cash Flows (Page 4) Provides a detailed accounting of the actual flow of cash into and out of the CWSRF fund. Statement of Net Assets (Page 5) Describes CWSRF assets and liabilities through the end of the fiscal year. Assets include financial assets and capital assets. Liabilities include both current and long-term liabilities. CWSRF assets include grant funds that have been drawn from the federal treasury to date, but do not include total grant awards. CWSRF assets also include state matching contributions that have been deposited in the fund. 2018 Financial Statements | Page 1 ------- Statement of Fund Activity (Millions of Dollars) Annual Fund Activity FY 2017 FY 2018 Federai Capitalization Grants 996.5 1,364.5 State Matching Funds 220.1 560.6 New Funds Available for Assistance 6,625.9 6,567.9 Executed Assistance Agreements 7,451.9 6,788.7 Project Disbursements 6,368.5 6,255.4 Cash Draws from Federal Capitalization Grants 1,259.7 1,225.7 Total Annual Subsidy 300.1 250.8 Grants 101.5 19.9 Negative interest 0.0 0.0 Principal Forgiveness 198.6 231.0 Cumulative Fund Activity Federal Capitalization Grants 41,978.7 43,343.2 State Matching Funds 7,873.7 8,434.2 Funds Available for Assistance 128,120.2 134,688.1 Executed Assistance Agreements 126,190.0 132,978.7 Project Disbursements 110,188.1 116,443.6 Cash Draws from Federal Capitalization Grants 40,508.9 41,734.6 Total Cumulative Subsidy 4,596.2 4,847.0 Grants 634.9 654.7 Negative Interest 0.0 0.0 Principal Forgiveness 3,961.3 4,192.2 2018 Financial Statements | Page 2 ------- Statement of Revenues, Expenses, and Earnings (Millions of Dollars) Operating Revenues FY 2017 FY 2018 Interest on Investments 254.8 325.1 Interest on Loans 979.8 989.9 Total Operating Revenues 1,234.6 1,315.0 Operating Expenses Bond Interest Expense 866.8 907.5 Amortized Bond Issuance Expense 18.7 27.0 Administrative Expenses 61.4 49.0 Additional Subsidy Provided 300.1 250.8 Total Expenses 1,247.0 1,234.3 Nonoperating Revenues and Expenses Federal Contribution (Cash Draws) 1,259.7 1,225.7 State Contributions 151.4 152.6 Transfers from (to) DWSRF (1.9) (61.4) Total Nonoperating Revenues (Expenses) 1,409.1 1,317.0 Increase (Decrease) in Net Assets 1,396.7 1,397.7 Net Assets Beginning of Year 48,268.9 49,665.6 End of Year 49,665.6 51,063.3 iyrow^.iiiiiiMiiii' r'TVWi. .EĢ liiiiiniiiiiBiiiiiiiiiiiiiiiiiiiiiiiiiniit' rĢHĢ!l?E'IIM 2018 Financial Statement I Page 3 ------- Statement of Cash Flows (Millions of Dollars) Operating Activities FY 2017 FY 2018 Cash Draws from Federal Capitalization Grants 1,259.7 1,225.7 Contributions from States 151.4 152.6 Loan Disbursements (Including Additional Subsidy) (6,368.5) (6,255.4) Loan Principal Repayments 3,930.8 4,110.4 Interest Received on Loans 979.8 989.9 Administrative Expenses (61.4) (49.0) Total Cash Flows from Operating Activities (108.2) 174.2 Noncapital Financing Activities Gross Leveraged Bond Proceeds 2,215.4 1,962.8 Bond Issuance Expense (18.7) (13.3) State Match Bond Proceeds 68.8 407.9 Cash Received from Transfers with DWSRF (1.9) (61.4) Interest Paid on Leveraged and State Match Bonds (866.8) (907.5) CWSRF Funds Used for Refunding (23.0) 0.0 Principal Repayment of Leveraged Bonds (1,470.7) (2,102.4) Principal Repayment of State Match Bonds (65.8) (133.4) Net Cash Provided by Noncapital Financing Activities (162.7) (847.2) Investing Activities Interest Received on Investments 254.8 325.1 Release (Deposit) of Leveraged Bond Debt Service Reserve 32.0 281.4 Net Cash Provided by Investing Activities 286.7 606.4 Net Increase (Decrease) in Cash and Cash Equivalents 15.9 (66.5) Cash and Cash Equivalents Beginning of Year 13,624.1 13,640.0 End of Year 13,640.0 13,573.4 2018 Financial Statements | Page 4 ------- Statement of Net Assets (Millions of Dollars) Assets FY 2017 FY 2018 Cash and Cash Equivalents 13,640.0 13,573.4 Debt Service Reserve - Leveraged Bonds 3,642.3 3,360.9 Loans Outstanding 52,889.0 54,783.3 Unamortized Bond Issuance Expenses* 256.8 243.1 Total Assets 70,428.0 71,960.7 Liabilities Match Bonds Outstanding 607.5 882.0 Leveraged Bonds Outstanding 20,155.0 20,015.4 Total Liabilities 20,762.4 20,897.4 Net Assets Federal Contributions (Cash Draws) 40,508.9 41,734.6 State Contributions 5,648.6 5,801.3 Transfers - Other SRF Funds (534.3) (595.6) Other Net Assets 4,042.3 4,123.1 Total Net Assets 49,665.6 51,063.3 Total Liabilities and Net Assets 70,428.0 71,960.7 * Unamortized Bond Issuance Expenses are costs that have been incurred but have not been fully recognized (amortized). These costs will be recognized (amortized) overtime over the remaining life of the bonds outstanding, similar to a pre-paid expense, and consistent with GAAP. 2018 Financial Statements | Page 5 ------- For more information about the Clean Water State Revolving Fund, please contact us at: United States Environmental Protection Agency Office of Wastewater Management Clean Water State Revolving Fund Branch 1200 Pennsylvania Avenue NW (4204M) Washington, DC 20460 J* Clean Water State Revolving Fund www.epa.gov/cwsrf vvEPA Office of Water April 2019 EPA Publication 832R19001 ------- |