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A money changer inspects U.S. dollar bills at a currency exchange in Manila January 15, 2014. REUTERS/Romeo Ranoco A money changer inspects U.S. dollar bills at a currency exchange in Manila January 15, 2014. REUTERS/Romeo Ranoco  

Colorado agencies carrying too much unspent money

The Colorado state auditor has found 34 state-run cash funds in 12 different departments filled with more money than state law allows.

If left unaddressed, this could trigger a refund to taxpayers under the state’s Taxpayer Bill of Rights.

Combined, the funds have $25.6 million more than they should. About half have exceeded the statutory limits for reserve funds for three years in a row; 12 have exceeded the limits for five years.

One fund, run by the Department of Regulatory Agencies, has been out of compliance for a total of 13 years.

Moreover, nine state departments misreported the amount of excess cash to the Office of State Planning and Budgeting, which makes sure agencies’ financials jibe with what is reported to the state controller.

The reserve fund limit was adopted in 1998 to ensure the state complies with the Taxpayer Bill of Rights, which puts a ceiling on how much revenue from sales taxes and fees state departments can collect before the state is forced to issue a refund to Colorado taxpayers. The TABOR limit, as it’s called, is calculated each year; the statutory maximum for reserve funds is meant to prevent the state from hitting the limit and triggering a refund.

The reserve limit is set at 16.5 percent of annual expenditures for each fund, or about two months worth of operational expenses, according to the state audit. Those that exceed the limit are required to cut fees to bring the balance down.

“However, there is no penalty for maintaining excess reserves or not reducing fees,” the audit report notes.

Auditor’s noted that the state’s TABOR revenue is expected to grow in the coming years and excess funds “will have a greater potential impact on the determination as to whether the State owes a TABOR refund.”

Cutting fees — for everything from licenses for medical marijuana patients to those charged for oil and gas operating permits — would give the state some breathing room. But even auditors noted that they don’t expect every department to slash fees drastically enough to come into complete compliance for the upcoming year.

“It is unrealistic to expect each department to so drastically reduce its fee revenue for Fiscal Year 2014,” the report notes. “However, it demonstrates the taxpayer dollars that could be saved if the departments that have cash funds out of compliance took action to reduce fees and bring their funds into compliance.”

In addition to cutting fees, auditors recommended improvements to reporting oversight to ensure the excess reserves are properly reported. Those figures, ultimately, are used to set TABOR limits.

All departments implicated in the audit agreed with its recommendations.

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