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Mn/DOT AUDITMn/DOT AUDIT
COUNTY HIGHWAY ACCOUNTANTSCOUNTY HIGHWAY ACCOUNTANTS
SINGLE AUDIT DISCUSSIONSINGLE AUDIT DISCUSSION
Mn/DOT Office of Audit Organization Chart
External Audit Mgr. External Audit Mgr.MMA 216Larry Kienitz Suzanne Thayer Bruce Kalland
Student Worker
Gregg Fuerstenberg
Senior AuditorMaynard Guenther
Intermediate AuditorVan Vu
Intermediate AuditorRuth Hinrichs-Clark
Guptan Kaplingat
Student WorkerCarmon Yang
RAILROAD, UTILITY,
TRANSIT UNIT
Intermediate AuditorFelicia Wells
Principal Auditor
Richard Juntilla
CONSULTANT AGR. CONSULTANT LIAISON &
PRE AWARD AUDIT UNITCLOSE-OUT UNIT
Deputy CommissionerDoug Differt
Daniel KahnkeAudit Director
Sr. Auditor SupervisorDave Wolvert
INTERNAL AUDIT
UNIT
Internal Audit Mgr. External Audit Mgr.
Greg Hlivka
Brian Cherry
Principal Auditor Dave Christensen
Mike Johnson
Senior Auditor
Intermediate Auditor
Student Worker
Senior Auditor Randy Stallkamp
Senior Auditor Allen Kachelmyer
SINGLE AUDIT OUTLINESINGLE AUDIT OUTLINE
Project SelectionProject Selection
DCP RequirementsDCP Requirements
Davis-Bacon Act Compliance Davis-Bacon Act Compliance
Contract Item Payments Contract Item Payments
Material on Hand PaymentsMaterial on Hand Payments
Supplemental Agreement PaymentsSupplemental Agreement Payments
Environmental Requirements ComplianceEnvironmental Requirements Compliance
Material TestingMaterial Testing
Single Audit Report ProcessSingle Audit Report Process
PROJECT SELECTION
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, Project Type, Location
PROJECT SELECTION – NO PEEKING!
DCP REQUIREMENTS
Evaluate Measures Taken to Ensure That DCP Projects are Administered Properly
Right of Way (Right of Way Certificate, Right of Way Acquisition Files, 1099 Forms)
Advertising, Bid Letting, Bid Tabulation
Contract and Bond (Original Contract and Payment/Performance Bond)
Most Recent State Auditor Report
Controlling Time Charges (Project Proposal Special Provisions and Weekly Construction Diaries): Tracking of Working Days
Recent Audit Results: DCP Recent Audit Results: DCP RequirementsRequirements
Success in Meeting Requirements Success in Meeting Requirements Contract and BondContract and Bond Right of Way DocumentationRight of Way Documentation AdvertisingAdvertising Controlling Time ChargesControlling Time Charges
Opportunities for Improvement – None Noted Opportunities for Improvement – None Noted
DAVIS-BACON ACT COMPLIANCE
Evaluate Measures Taken to Ensure That Required Wages are Paid to Contractor and Subcontractor Employees
Payroll/21658 Statement of Compliance Form Submittal and Review by City/County (Requests to Sublet; Weekly Construction Diary; Daily Diaries; Payrolls and/or 21658 Statement of Compliance Forms; Project Proposal Wage Decisions; Payroll Tracking Forms; all Correspondence Files )
Wage Compliance Checks (Completed Wage Compliance Check Forms)
Payroll Security
Recent Audit Results: Davis-Bacon Act Recent Audit Results: Davis-Bacon Act ComplianceCompliance
Success in Meeting Requirements Success in Meeting Requirements Wage Rate CheckingWage Rate Checking Tracking of Payroll ReceiptTracking of Payroll Receipt Payrolls Labeled With Wage Classification CodesPayrolls Labeled With Wage Classification Codes
Opportunities for ImprovementOpportunities for Improvement Monthly Wage Compliance Checks - Administration Manual 5-591.320 (A)(3)(b)Monthly Wage Compliance Checks - Administration Manual 5-591.320 (A)(3)(b)
Requests to Sublet Needed for Each Subcontractor - Specification 1801Requests to Sublet Needed for Each Subcontractor - Specification 1801 The Inspector’s Diary Does Not Document all Companies Working On The Project –The Inspector’s Diary Does Not Document all Companies Working On The Project –
Contract Administration Manual 5-591.320(A)(1)(b)(1) Contract Administration Manual 5-591.320(A)(1)(b)(1)
www.dot.state.mn.us/const/manuals/contractadmin/sec-320.pdfwww.dot.state.mn.us/const/manuals/contractadmin/sec-320.pdf
www.dot.state.mn.us/const/labor/documents/posterboards/fieldreviewform.pdfwww.dot.state.mn.us/const/labor/documents/posterboards/fieldreviewform.pdf
www.dot.state.mn.us/tecsup/spec/index.htmlwww.dot.state.mn.us/tecsup/spec/index.html
www.dot.state.mn.us/const/labor/documents/contractdocs/requesttosublet.pdfwww.dot.state.mn.us/const/labor/documents/contractdocs/requesttosublet.pdf
CONTRACT ITEM PAYMENTS
Evaluate Support for and Timing of Contract Item Payments (Partial Payments; Supporting Documentation)
Partial Payment Timeliness (Partial Payments; Change in Construction Contract Status Forms)
Recent Audit Results: Contract Item Recent Audit Results: Contract Item PaymentsPayments
Success in Meeting Requirements Success in Meeting Requirements Most Contract Item Payments are Timely and Well DocumentedMost Contract Item Payments are Timely and Well Documented Change in Contract Construction Status Forms are CompletedChange in Contract Construction Status Forms are Completed
Opportunities for ImprovementOpportunities for Improvement Partial Payments are not Made Every 35 Days - M.S. 471.425Partial Payments are not Made Every 35 Days - M.S. 471.425
Contract Bid Item Mobilization Not Paid Properly - Specification 2021Contract Bid Item Mobilization Not Paid Properly - Specification 2021 Bituminous Tickets do not Include the Mix Design Report Number, Mixture Designation, or Street Inspector Initials – Specification 2360.4F(7) and Bituminous Manual 5-693.725 Fig. B (1), 14. A.Bituminous Tickets do not Include the Mix Design Report Number, Mixture Designation, or Street Inspector Initials – Specification 2360.4F(7) and Bituminous Manual 5-693.725 Fig. B (1), 14. A. Contract Bid Item Field Laboratory Not Paid Properly (Each Unit of Measure, should not be Paid in Fractions) - Specification 1501Contract Bid Item Field Laboratory Not Paid Properly (Each Unit of Measure, should not be Paid in Fractions) - Specification 1501 Payment for Material on Hand and Supplemental Agreements, as Well as Withholding for Erodible Acres Documented in the Contract Bid Item Section of Partial Payments Rather Than Separately Payment for Material on Hand and Supplemental Agreements, as Well as Withholding for Erodible Acres Documented in the Contract Bid Item Section of Partial Payments Rather Than Separately
as an Adjustment - Specification 1501as an Adjustment - Specification 1501
www.revisor.leg.state.mn.us/stats/471/425.htmlwww.revisor.leg.state.mn.us/stats/471/425.html
www.dot.state.mn.us/tecsup/spec/index.htmlwww.dot.state.mn.us/tecsup/spec/index.html
MATERIAL ON HAND PAYMENTS Determine if Material on Hand Payments are Made at the Correct Price and Supported by Invoice
Material on Hand Payments (Partial Payments; Materials on Hand Invoices)
Determine if Material on Hand Amounts are Reduced as Material on Hand Quantities are Placed
Recent Audit Results: Material on Hand Recent Audit Results: Material on Hand PaymentsPayments
Success in Meeting Requirements Success in Meeting Requirements Payments are Supported by Contractor InvoicePayments are Supported by Contractor Invoice Payments are Made at Invoice Price, Rather Than Contract Bid Item Placed PricePayments are Made at Invoice Price, Rather Than Contract Bid Item Placed Price Material on Hand Balances are Credited as Material is Placed into the Work and Paid Material on Hand Balances are Credited as Material is Placed into the Work and Paid
forfor
Opportunities for Improvement – None NotedOpportunities for Improvement – None Noted
DRAWING FOR 1st DOOR PRIZE: DOUBLE CHOCOLATE BROWNIES !!!!
SUPPLEMENTAL AGREEMENT PAYMENTS Evaluate Controls Over Supplemental Agreement Payments
Proper Execution (Executed Supplemental Agreements)
Payment Made After Execution of Supplemental Agreement (Partial Payments, Executed Supplemental Agreements)
Recent Audit Results: Supplemental Agreement Recent Audit Results: Supplemental Agreement PaymentsPayments
Success in Meeting Requirements Success in Meeting Requirements Supplemental Agreement Form and Execution is Proper (District State Aid Engineers Supplemental Agreement Form and Execution is Proper (District State Aid Engineers
Signing “For Funding Only”)Signing “For Funding Only”) Payment Occurs After ExecutionPayment Occurs After Execution Payments are Accurate (not Duplicated)Payments are Accurate (not Duplicated)
Opportunities for ImprovementOpportunities for Improvement Better Control Over Cost Overruns Due to Inadequate Geotechnical Surveys (Leading to Incorrect Contract Bid Item Amounts in Project Designs and Engineer’s Better Control Over Cost Overruns Due to Inadequate Geotechnical Surveys (Leading to Incorrect Contract Bid Item Amounts in Project Designs and Engineer’s
Estimates) Needed – A-133 Compliance Supplement Part 3 B Allowable Costs/Cost Principles, page B-3-B: Costs Must be Reasonable and NecessaryEstimates) Needed – A-133 Compliance Supplement Part 3 B Allowable Costs/Cost Principles, page B-3-B: Costs Must be Reasonable and Necessary Value Engineering Incentive Payments Should be Based on Current Project Costs and not on Future Project Costs - A-133 Compliance Supplement Part 3 B Value Engineering Incentive Payments Should be Based on Current Project Costs and not on Future Project Costs - A-133 Compliance Supplement Part 3 B
Allowable Costs/Cost Principles, page B-3-B: Costs Must be Reasonable and NecessaryAllowable Costs/Cost Principles, page B-3-B: Costs Must be Reasonable and Necessary
www.whitehouse.gov/omb/circulars/a133_compliance/06/pt3.pdfwww.whitehouse.gov/omb/circulars/a133_compliance/06/pt3.pdf
ENVIRONMENTAL REQUIREMENTS COMPLIANCE
Evaluate Measures Taken to Ensure Compliance With Environmental Requirements
NPDES Permit Compliance (Erosion Control Inspection Logs; Stormwater Pollution Prevention Plan; Application for NPDES Permit; Letter From MPCA Acknowledging Permit Coverage; Change in Construction Contract Status Forms)
Building Removal (Building Materials Inspection Report; Notice of Intent to Perform Asbestos Related Work if Applicable; Notice of Intent to Perform a Demolition; Hazardous Waste Manifests if Applicable)
Recent Audit Results: Environmental Requirements Recent Audit Results: Environmental Requirements ComplianceCompliance
Success in Meeting Requirements Success in Meeting Requirements MPCA National Pollutant Discharge Elimination System (NPDES) Permit CoverageMPCA National Pollutant Discharge Elimination System (NPDES) Permit Coverage Improvement noted in Documenting of NPDES Permit Weekly InspectionsImprovement noted in Documenting of NPDES Permit Weekly Inspections Notification of Intent to Perform Demolitions are being DoneNotification of Intent to Perform Demolitions are being Done Stormwater Pollution Prevention Plans (SWPPP) are being DoneStormwater Pollution Prevention Plans (SWPPP) are being Done
Opportunities for ImprovementOpportunities for Improvement Need to Apply Withholding for Erodible Acres – Specification 2105.5Need to Apply Withholding for Erodible Acres – Specification 2105.5
www.dot.state.mn.us/tecsup/spec/2005/2021-2360.pdfwww.dot.state.mn.us/tecsup/spec/2005/2021-2360.pdf
MATERIAL TESTING
Assess Measures Taken to Accomplish Compliance With Material Testing Requirements
Bituminous Production/Testing Compliance
Concrete Production/Testing Compliance
Grading and Base Testing Compliance
Single Audit Report ProcessSingle Audit Report Process
Meet With County Engineer at End of Week When Meet With County Engineer at End of Week When Audit is Finished to Discuss Results of Audit for Audit is Finished to Discuss Results of Audit for Specific Projects: Spring and Summer Specific Projects: Spring and Summer
Results From 15-18 Highway Construction Audits Results From 15-18 Highway Construction Audits Combined and Evaluated in OctoberCombined and Evaluated in October
Meetings to Discuss Audit Results in November:Meetings to Discuss Audit Results in November:
Office of MaterialsOffice of Materials Office of Construction and Innovative Contracting Office of Construction and Innovative Contracting State Aid for Local Transportation DivisionState Aid for Local Transportation Division Mn/Dot Commissioner’s StaffMn/Dot Commissioner’s Staff
Single Audit Report ProcessSingle Audit Report Process
Draft Report for Response Issued in December; Finding Draft Report for Response Issued in December; Finding Recommendations Addressed to Mn/DOT Division DirectorsRecommendations Addressed to Mn/DOT Division Directors
Finding Recommendations Related to County Projects Addressed to Finding Recommendations Related to County Projects Addressed to Mn/DOT State Aid EngineerMn/DOT State Aid Engineer
Responses to Audit Findings Evaluated and Accepted by Mn/DOT Responses to Audit Findings Evaluated and Accepted by Mn/DOT Deputy CommissionerDeputy Commissioner
Final Report With Responses Issued in January is a Public DocumentFinal Report With Responses Issued in January is a Public Document
www.dot.state.mn.us/const/tools/references.html - Audit Report & Description of Audit www.dot.state.mn.us/const/tools/references.html - Audit Report & Description of Audit Process OnlineProcess Online
DRAWING FOR 2nd DOOR PRIZE !!!!
Your QuestionsYour Questions
Thank You For Inviting Us!Thank You For Inviting Us!
Dave ChristensenPrincipal Auditor
Special Audits and AnalysisMn/DOT Office of Audit 7th Floor
Transportation Bldg MS 190395 John Ireland BlvdSaint Paul MN 55155
Office (651) 366-4147; fax [email protected]
