EPA Issues Audit Guide for SRF Programs

EPA has released an updated guide for auditors of state clean water and drinking water revolving fund (SRF) programs. The audit guide was originally issued in June 1998 as an aid to performing financial audits of the Clean Water State Revolving Funds administered by states. The updated guide includes information on Drinking Water SRF financial statement audits.

EPA said the guide was revised to include the drinking water information because accounting for the loan portion of the two programs is the same. Many states operate both programs in the same organization or department, and including both programs in a single document seemed logical.

Also, the Governmental Accounting Standards Board (GASB) has issued a number of pronouncements that affect financial reporting of the states, and the SRFs. The guide includes information on implementing GASB 34 requirements. Most SRF programs will be required to implement GASB 34 for years ending June 30, 2002. This guide is not intended to be used as an all encompassing discussion on the implementation of GASB 34, but only identify how it may affect the SRFs based upon OIG experience.