Deadline given to Colorado agencies holding on to $25.6 million owed to taxpayers

Lawmakers demand solutions by August

DENVER - Colorado agencies holding on to millions in surplus taxpayer funds have until August to fix the problem. State lawmakers are demanding answers after a February audit found 12 state agencies are sitting on a total of $25.6 million in excess uncommitted reserves, a violation of state law.

The law limits the amount of excess reserves Colorado government agencies can maintain in their cash funds, requiring agencies in violation, to lower fees as a way of paying the money back to taxpayers. Under the law, state agencies should only keep two months of reserve cash for each program before reducing fees.

However, agencies face no penalties for violating the law, which may explain why the audit found several state agencies with funds that have not been in compliance for 10 years. 

In response, state lawmakers on the legislative audit committee sent out letters with stern messages, requiring agencies to take actions to deal with the surplus funds on or before a hearing scheduled in August.

Senator Steve King (R) is the chair of the legislative audit committee. His signature is on each letter. King said the audit committee is trying to hold department heads accountable for dealing with the excess funds owed to taxpayers.

"The letters basically said, here's the problem, fix it," further explained Senator King.

7NEWS obtained copies of the letters that were sent out to nine of the 12 departments that have been out of compliance with the law for three or more consecutive years. Those agencies are the Department of Public Health and Environment, Department of Human Services, Department of Revenue, Department of Regulatory Agencies, Department of Public Safety, Department of Law, Department of Personnel & Administration, Department of State, and Department of Natural Resources.

The letters some as long as nine pages, outline the excess cash and include previous department responses for withholding the public's money. Each one ends by requesting a status report, indicating what actions have been taken, "to ensure the Funds' compliance with SB 98-194."

"I would say we'll have a pretty good discussion about this in August if in fact they don't deal with the problem," said Senator King.

The audit found the Department of Public Health and Environment's (CDPHE) medical marijuana cash fund has the largest amount of excess reserve in the state, with more than $12 million in excess uncommitted reserves. The audit found the fund has been out of compliance for ten years.

Within the letter that was sent out to CDPHE's Executive Director, Dr. Larry Wolk, is the department's response from the previous year, explaining why its medical marijuana cash fund continues to withhold the public's money. It claimed that "Under the State Constitution, this fund can only be used for Medical Marijuana Registry related expenditures. Currently, CDPHE does not have the spending authority that would allow us to reduce this excess balance in any manner."

Investigative Reporter Amanda Kost asked Senator King what he would say to agencies that claim, under the law, there is no choice but to hold on to the excess taxpayer money.

"I think that there are many times where you can read a law and read into it what you want to read in to it rather than the spirit and intent of the law," said Senator King.

CDPHE has since told 7NEWS that its medical marijuana cash fund will be in compliance with state law by June 2015. State health leaders have already implemented two fee reductions. The first fee adjustment was made in 2012. In February, CDPHE further lowered medical marijuana license fees from $35 to $15.

CDPHE is also in the process of having a funding change request approved by the legislature. CDPHE submitted a request to use more than $8 million of the excess funds in its medical marijuana cash fund to research the health effects of pot and update its marijuana registry computer system.

Senator King and the legislative audit committee are demanding solutions from all 12 state agencies by August 1, 2014.

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