Oversight of the Clean Water State Revolving Fund

Issued Date
December 30, 2021
New York State Environmental Facilities Corporation


To determine if the Environmental Facilities Corporation (Corporation) is adequately overseeing the Clean Water State Revolving Fund (CWSRF) to ensure funds are being awarded, used, and collected in accordance with requirements and in support of CWSRF goals, including ensuring projects meet their intended purposes. The audit period covers projects that were active between October 2017 and September 2021.

About the Program

The Corporation is a public benefit corporation that provides financial and technical assistance primarily to municipalities for their water quality infrastructure projects. Its mission is to assist communities throughout the State to undertake critical water quality infrastructure projects by providing access to low-cost capital, grants, and expert technical assistance. Established in 1990, the CWSRF provides communities low-cost financing for a wide range of water quality infrastructure projects. The Corporation provides interest-free or low-interest rate financing to municipalities to support a variety of eligible water quality improvement projects. Since the inception of the CWSRF, the Corporation, in conjunction with the Department of Environmental Conservation (DEC), has provided more than $30 billion in low-cost financing to communities. Under a memorandum of understanding (MOU) with DEC, the Corporation, along with DEC, is responsible for administering the CWSRF. The MOU states that the Corporation and DEC shall work cooperatively to develop terms and conditions governing the design, construction, operation, and maintenance of CWSRF projects. The Corporation enters into a project financing agreement (PFA) with each loan recipient and has responsibility for the overall administration of CWSRF projects, including monitoring compliance with the provisions of the PFA. The provisions require recipients to comply with approved project plans and applicable rules and regulations and maintain the project to ensure it continues to meet its intended goal throughout the term of the PFA.

Key Findings

  • The Corporation generally has adequate controls to ensure projects are awarded according to established scoring criteria, meet the requirements of the CWSRF, and are repaid timely. Also, the Corporation adequately monitors projects during construction to project completion through a combination of on-site inspections, communication with recipients, and receipt of fiscal and project progress documentation such as photographs and on-site inspection reports.
  • The Corporation could improve post-construction performance and maintenance monitoring to determine whether projects continue to operate as intended and whether the maintenance terms of the PFA are being met.

Key Recommendation

Develop a structured process between DEC and the Corporation for communicating postconstruction project maintenance and operating status, including information that would enable the Corporation to determine whether recipients are complying with the PFA.

Nadine Morrell

State Government Accountability Contact Information:
Audit Director
: Nadine Morrell
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236