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Mn/DOT AUDIT 2010 COUNTY HIGHWAY ACCOUNTANTS CONFERENCE SINGLE AUDIT DISCUSSION.

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Presentation on theme: "Mn/DOT AUDIT 2010 COUNTY HIGHWAY ACCOUNTANTS CONFERENCE SINGLE AUDIT DISCUSSION."— Presentation transcript:

1 Mn/DOT AUDIT 2010 COUNTY HIGHWAY ACCOUNTANTS CONFERENCE SINGLE AUDIT DISCUSSION

2 SINGLE AUDIT OUTLINE 3 How Your Project Gets Selected For Audit 3 ARRA Requirements 3 Material Testing 3 Single Audit Report Process

3 HOW YOUR PROJECT GETS SELECTED FOR AUDIT Single Audit Act of 1984: Highway Planning and Construction Program Agreement With Office of Legislative Audit Letter of Agreement and Stewardship Plan Between Mn/DOT and the Federal Highway Administration Population of Highway Construction Payments for the State Fiscal Year Ended June 30 15-18 Highway Construction Projects Selected for Audit (some trunk highway and some city/county) Factors Influencing Selection: Project Size, American Recovery and Reinvestment Act (ARRA), Project Type, Location FHWA guidance to us for this year: audit 2/3 city/county projects and 1/3 trunk highway projects; also, 50% ARRA projects

4 AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA) REQUIREMENTS See http://www.whitehouse.gov/omb/assets/a133_compliance/arra_addendum_1.pdf pages 29-53 and specific page references belowhttp://www.whitehouse.gov/omb/assets/a133_compliance/arra_addendum_1.pdf Need to have certification that ARRA Buy American provisions are met for Iron, Steel, and Manufactured Goods; also need Buy American provision in ARRA project proposals, page 33 of 301 Proposal language and practices addressing use of debarred contractors needs to be the same between Federal and non-federal (state aid) projects, page 33 of 301 Schedule of Federal Expenditures in annual financial reports needs to separately document ARRA expenditures, page 52 of 301 Data Collection Form (SF-SAC) in Single Audit Clearing House (http://harvester.census.gov/sac) needs to separately document ARRA expenditures, page 52 of 301http://harvester.census.gov/sac Cities and Counties must be registered in the Central Contractor Registration (CCR) database (https://www.bpn.gov/ccr/default.aspx ), page 45 of 301https://www.bpn.gov/ccr/default.aspx Contractors should be submitting reports indicating hiring for ARRA projects – reports should be checked for accuracy – see change in federal requirement addressing use of full-time equivalent for calculating hiring for ARRA projects www.whitehouse.gov/omb/assets/recovery_act/OFPP_RecoveryReviewGuidance.pdf http://www.whitehouse.gov/omb/assets/memoranda_2010/m10-08.pdf

5 MATERIAL TESTING Assess Measures Taken to Accomplish Compliance With Material Testing Requirements Grading and Base Testing Requirements Concrete Production/Testing Compliance Bituminous Production/Testing Compliance

6 Recent Audit Results: Material Testing (Grading & Base) Audit Finding for 3 Consecutive Years Opportunities for Improvement Opportunities for Improvement Payment reductions need to be taken at the time of payment for work rather than at the end of the project (failing gradations; bitumen content) Payment reductions need to be taken at the time of payment for work rather than at the end of the project (failing gradations; bitumen content) Preliminary and Final Grading and Base Reports Need to be Completed correctly and Sent in to the Grading and Base Unit (Grading and Base Manual, 5-692.301) Preliminary and Final Grading and Base Reports Need to be Completed correctly and Sent in to the Grading and Base Unit (Grading and Base Manual, 5-692.301) Contractor Certificate of Compliance and QC Gradations Must be Submitted to and Accepted by the Engineer Prior to placement and payment (2005 Specification 2211.3 F1, Special Provisions) Contractor Certificate of Compliance and QC Gradations Must be Submitted to and Accepted by the Engineer Prior to placement and payment (2005 Specification 2211.3 F1, Special Provisions) QA gradations need to be done with Random Sampling Method per Schedule of Materials Control and Grading and Base Manual Chapter 7 (also Random Sampling Acceptance Report – Grading and Base Manual) QA gradations need to be done with Random Sampling Method per Schedule of Materials Control and Grading and Base Manual Chapter 7 (also Random Sampling Acceptance Report – Grading and Base Manual) Perform DCP tests (Schedule of Materials Control) Perform DCP tests (Schedule of Materials Control) Perform Relative Density and Relative Moisture Tests (Schedule of Materials Control) Perform Relative Density and Relative Moisture Tests (Schedule of Materials Control) Moisture Content Tests Must be Done to Verify 5% Moisture to Achieve Compaction (Schedule of Materials Control, 2005 Specification 2211.3 C2, C3, Special Provisions) Moisture Content Tests Must be Done to Verify 5% Moisture to Achieve Compaction (Schedule of Materials Control, 2005 Specification 2211.3 C2, C3, Special Provisions) QC and QA Percent Crushing (Schedule of Materials Control, Specification 3138.2C) QC and QA Percent Crushing (Schedule of Materials Control, Specification 3138.2C) Aggregate Quality (Schedule of Materials Control, Specification 3138.2D, 2E) Aggregate Quality (Schedule of Materials Control, Specification 3138.2D, 2E) Need to Verify Maximum of 3% Bitumen Content for Aggregate Base Class 7(B) (Specification 3138.2 A2a(a)) Need to Verify Maximum of 3% Bitumen Content for Aggregate Base Class 7(B) (Specification 3138.2 A2a(a)) Materials Certification Exceptions Summary needs to list missed tests and failing tests and resolution during the project as well as when the project is finaled(Contract Admin Manual 5-591.430 page MATLCERT-4) Materials Certification Exceptions Summary needs to list missed tests and failing tests and resolution during the project as well as when the project is finaled(Contract Admin Manual 5-591.430 page MATLCERT-4)

7 Recent Audit Results: Material Testing (Concrete) Success in Meeting Requirements Success in Meeting Requirements QC and QA Coarse and Fine Aggregate Gradation Tests Usually Done as Required QC and QA Coarse and Fine Aggregate Gradation Tests Usually Done as Required Cylinder Tests Done as Required Cylinder Tests Done as Required Opportunities for Improvement Opportunities for Improvement Need to Complete and Submit Weekly Certified Ready Mix Plant Reports and Test Beam Data to the Concrete Unit (Concrete Manual, 5-694.701; 5-694.744(1)) Need to Complete and Submit Weekly Certified Ready Mix Plant Reports and Test Beam Data to the Concrete Unit (Concrete Manual, 5-694.701; 5-694.744(1)) Cores for Thickness need to be done (Schedule of Materials Control) Cores for Thickness need to be done (Schedule of Materials Control) Take payment reductions for air content falling outside specification (Specification 2461.4A4b) Take payment reductions for air content falling outside specification (Specification 2461.4A4b) Conduct Coarse Aggregate Testing on No. 200 sieve (Specification 3137.2D1(i), Schedule of Materials Control) Conduct Coarse Aggregate Testing on No. 200 sieve (Specification 3137.2D1(i), Schedule of Materials Control) Cementitious Materials and Admixtures for Concrete testing needs to be done Cementitious Materials and Admixtures for Concrete testing needs to be done Contractor needs to perform and document QC verification companion sample gradations (Schedule of Materials Control) Contractor needs to perform and document QC verification companion sample gradations (Schedule of Materials Control) Contractor needs to perform and document QC moisture testing for aggregates Contractor needs to perform and document QC moisture testing for aggregates Air and Slump Tests should be taken as required and Documented on the Weekly Concrete Report (Schedule of Materials Control, Concrete Manual 5-694.727) Air and Slump Tests should be taken as required and Documented on the Weekly Concrete Report (Schedule of Materials Control, Concrete Manual 5-694.727) Certificate of Compliance Needed for Dowel Bars (Schedule of Materials Control) Certificate of Compliance Needed for Dowel Bars (Schedule of Materials Control) QA/verification testing needs to be performed by agency/agency controlled personnel; QC testing needs to be performed by contractor/contractor controlled personnel (23 CFR 637.205 and 637.207) QA/verification testing needs to be performed by agency/agency controlled personnel; QC testing needs to be performed by contractor/contractor controlled personnel (23 CFR 637.205 and 637.207)

8 Recent Audit Results: Material Testing (Bituminous) Success in Meeting Requirements Success in Meeting Requirements Failing Materials Rarely Seen and are Properly Addressed Failing Materials Rarely Seen and are Properly Addressed Verification Testing is for the Most Part Done as Required Verification Testing is for the Most Part Done as Required Documentation, Including Test Summary Sheets, is Improving Documentation, Including Test Summary Sheets, is Improving Opportunities for Improvement Opportunities for Improvement Retesting When QC-Verification Test Result Differences Exceed Tolerances (Table 2360.4-M Tolerances and 2360.4N) Retesting When QC-Verification Test Result Differences Exceed Tolerances (Table 2360.4-M Tolerances and 2360.4N) Maintain a Bituminous Plant Diary (Contract Administration Manual 5-591.390) Maintain a Bituminous Plant Diary (Contract Administration Manual 5-591.390) Verification Samples From Behind the Paver Rather Than From the Truck Box (2360.4D) Verification Samples From Behind the Paver Rather Than From the Truck Box (2360.4D) Special Provisions Should not Call for Contractor to Transport Verification Samples (23 CFR 637.205(d)) Special Provisions Should not Call for Contractor to Transport Verification Samples (23 CFR 637.205(d)) Engineer needs to authorize paving of wear course in writing after October 15 or November 1 (depending on location) (2360.5B) Engineer needs to authorize paving of wear course in writing after October 15 or November 1 (depending on location) (2360.5B) 1 Agency Core needs to be taken and tested per lot (Schedule of Materials Control) 1 Agency Core needs to be taken and tested per lot (Schedule of Materials Control) 1 Verification test per day required (2360.4N) 1 Verification test per day required (2360.4N) Asphalt Binder should be sampled and tested to verify Performance Grade characteristics (Schedule of Materials Control) Asphalt Binder should be sampled and tested to verify Performance Grade characteristics (Schedule of Materials Control)

9 Single Audit Report Process Meet With County Engineer at End of Week When Audit is Finished to Discuss Results of Audit for Specific Projects: Spring and Summer Meet With County Engineer at End of Week When Audit is Finished to Discuss Results of Audit for Specific Projects: Spring and Summer Results From 15-18 Highway Construction Audits Combined and Evaluated in October Results From 15-18 Highway Construction Audits Combined and Evaluated in October Meetings to Discuss Audit Results in October/November: Meetings to Discuss Audit Results in October/November: Office of Materials Office of Materials Office of Construction and Innovative Contracting Office of Construction and Innovative Contracting State Aid for Local Transportation Division State Aid for Local Transportation Division Mn/Dot Commissioners Staff Mn/Dot Commissioners Staff

10 ANOTHER EXCITING MEETING WITH THE AUDITORS

11 Single Audit Report Process Draft Report for Response Issued in December; Finding Recommendations Addressed to Mn/DOT Division Directors Draft Report for Response Issued in December; Finding Recommendations Addressed to Mn/DOT Division Directors Finding Recommendations Related to County Projects Addressed to Mn/DOT State Aid Engineer Finding Recommendations Related to County Projects Addressed to Mn/DOT State Aid Engineer Responses to Audit Findings Evaluated and Accepted by Mn/DOT Deputy Commissioner Responses to Audit Findings Evaluated and Accepted by Mn/DOT Deputy Commissioner Final Report With Responses Issued in January is a Public Document Final Report With Responses Issued in January is a Public Document www.dot.state.mn.us/const/tools/references.htmlwww.dot.state.mn.us/const/tools/references.html - Audit Report & Description of Audit Process Online www.dot.state.mn.us/const/tools/references.html

12 Single Audit Report Process Audit Findings and Associated Questioned Costs are Normally Based on Patterns and Trends (multiple exceptions to requirements for multiple projects) Audit Findings and Associated Questioned Costs are Normally Based on Patterns and Trends (multiple exceptions to requirements for multiple projects) Costs are Questioned by Individual Contract Item Value by Project Costs are Questioned by Individual Contract Item Value by Project 70% of Questioned Costs Relate to Material Testing (primarily missed tests and payment reductions not taken or not taken timely for materials not meeting specifications) 70% of Questioned Costs Relate to Material Testing (primarily missed tests and payment reductions not taken or not taken timely for materials not meeting specifications) The Questioned Cost Committee Evaluates Questioned Costs, Creating a List of Likely Questioned Costs Which are Submitted to FHWA The Questioned Cost Committee Evaluates Questioned Costs, Creating a List of Likely Questioned Costs Which are Submitted to FHWA The Questioned Costs Committee Sometimes asks Project Personnel to Attend Committee Meetings and Provide Information Regarding Exceptions to Requirements Related to Questioned Costs The Questioned Costs Committee Sometimes asks Project Personnel to Attend Committee Meetings and Provide Information Regarding Exceptions to Requirements Related to Questioned Costs

13 Your Questions

14 Thank You For Inviting Us! Dave Christensen Principal Auditor Special Audits and Analysis Mn/DOT Office of Audit 7th Floor Transportation Bldg MS 190 395 John Ireland Blvd Saint Paul MN 55155 Office (651) 366-4147; fax 366-4155 dave.christensen@state.mn.us


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