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.Larry Kienitz Suzanne Thayer Bruce Kalland

Student WorkerGregg Fuerstenberg

Senior AuditorMaynard Guenther

Intermediate AuditorVan Vu

Intermediate AuditorRuth Hinrichs-Clark

Guptan Kaplingat

Student WorkerCarmon Yang

RAILROAD, UTILITY,TRANSIT UNIT

Intermediate AuditorFelicia Wells

Principal AuditorRichard 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 JohnsonSenior Auditor

Intermediate Auditor

Student Worker

Senior Auditor Randy Stallkamp

Senior Auditor Allen Kachelmyer

TYPICAL AUDITOR USING THE LATEST TECHNOLOGY

SINGLE AUDIT OUTLINESINGLE AUDIT OUTLINE

Project SelectionProject Selection

DCP RequirementsDCP Requirements

DavisDavis--Bacon Act Compliance 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

PROJECT SELECTION

Single Audit Act of 1984: Highway Planning and Construction Program

Agreement With Office of Legislative Audit

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

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

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)

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

“THE 3 WISE ENGINEERS” REACT TO SELECTION OF THEIR PROJECT FOR AUDIT

DCP REQUIREMENTS

Evaluate Measures Taken to Ensure That DCP Projects are Administered Properly

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)

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

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)

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

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 Findings: DCP RequirementsRecent Findings: DCP RequirementsWeekly and Daily Diaries not Maintained: Specification 1806.1 anWeekly and Daily Diaries not Maintained: Specification 1806.1 and Contract d Contract Administration Manual 5Administration Manual 5--591.390591.390

www.dot.state.www.dot.state.mnmn.us/.us/tecsuptecsup/spec/index.html/spec/index.html

www.dot.state.www.dot.state.mnmn.us/const/manuals/.us/const/manuals/contractadmincontractadmin

1099 Forms not Completed1099 Forms not Completedwww.dot.state.mn.us/stateaid/samanual/chap300.pdfwww.dot.state.mn.us/stateaid/samanual/chap300.pdf

www.dot.state.mn.us/stateaid/forms/figl300.pdfwww.dot.state.mn.us/stateaid/forms/figl300.pdf

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 Findings: DavisRecent Findings: Davis--Bacon Act ComplianceBacon Act Compliance

Subcontractors are not listed on a Request to Sublet: SpecificatSubcontractors are not listed on a Request to Sublet: Specification 1801ion 1801www.dot.state.www.dot.state.mnmn.us/const/labor/documents/.us/const/labor/documents/contractdocscontractdocs//requesttosubletrequesttosublet..pdfpdfwww.dot.state.www.dot.state.mnmn.us/.us/tecsuptecsup/spec/index.html/spec/index.html

Request to Sublet Form Does Not Include Running Total Of Value ORequest to Sublet Form Does Not Include Running Total Of Value Of Subcontractor f Subcontractor Work: Specification 1801Work: Specification 1801

Recent Findings: DavisRecent Findings: Davis--Bacon Act ComplianceBacon Act Compliance

Subcontractors are not listed on a Request to Sublet: SpecificatSubcontractors are not listed on a Request to Sublet: Specification 1801ion 1801www.dot.state.www.dot.state.mnmn.us/const/labor/documents/.us/const/labor/documents/contractdocscontractdocs//requesttosubletrequesttosublet..pdfpdfwww.dot.state.www.dot.state.mnmn.us/.us/tecsuptecsup/spec/index.html/spec/index.html

Request to Sublet Form Does Not Include Running Total Of Value ORequest to Sublet Form Does Not Include Running Total Of Value Of Subcontractor f Subcontractor Work: Specification 1801Work: Specification 1801

Payrolls Do Not Include Labor Classification Code (example: 101 Payrolls Do Not Include Labor Classification Code (example: 101 For Common For Common Laborer): Contract Administration Manual 5Laborer): Contract Administration Manual 5--591591--320(B)(4)(a)(8) 320(B)(4)(a)(8) www.dot.state.www.dot.state.mnmn.us/const/manuals/.us/const/manuals/contractadmincontractadmin

The Inspector’s Diary Does Not Document all Companies Working OnThe Inspector’s Diary Does Not Document all Companies Working On The Project: The Project: Contract Administration Manual 5Contract Administration Manual 5--591.320(A)(1)(b)(1)591.320(A)(1)(b)(1)

Recent Findings: DavisRecent Findings: Davis--Bacon Act ComplianceBacon Act Compliance

Subcontractors are not listed on a Request to Sublet: SpecificatSubcontractors are not listed on a Request to Sublet: Specification 1801ion 1801www.dot.state.www.dot.state.mnmn.us/const/labor/documents/.us/const/labor/documents/contractdocscontractdocs//requesttosubletrequesttosublet..pdfpdfwww.dot.state.www.dot.state.mnmn.us/.us/tecsuptecsup/spec/index.html/spec/index.html

Request to Sublet Form Does Not Include Running Total Of Value ORequest to Sublet Form Does Not Include Running Total Of Value Of Subcontractor f Subcontractor Work: Specification 1801Work: Specification 1801

Payrolls Do Not Include Labor Classification Code (example: 101 Payrolls Do Not Include Labor Classification Code (example: 101 For Common For Common Laborer): Contract Administration Manual 5Laborer): Contract Administration Manual 5--591591--320(B)(4)(a)(8)320(B)(4)(a)(8)www.dot.state.www.dot.state.mnmn.us/const/manuals/.us/const/manuals/contractadmincontractadmin

The Inspector’s Diary Does Not Document all Companies Working OnThe Inspector’s Diary Does Not Document all Companies Working On The Project: The Project: Contract Administration Manual 5Contract Administration Manual 5--591.320(A)(1)(b)(1)591.320(A)(1)(b)(1)

Field Compliance Review on Labor Provisions Not Completed MonthlField Compliance Review on Labor Provisions Not Completed Monthly: Contract y: Contract Administration Manual 5Administration Manual 5--591.320 (A)(3)(b)591.320 (A)(3)(b)www.dot.state.www.dot.state.mnmn.us/const/labor/documents/.us/const/labor/documents/posterboardsposterboards//fieldreviewformfieldreviewform..pdfpdf

Payrolls Not Submitted Weekly: Contract Administration Manual 5Payrolls Not Submitted Weekly: Contract Administration Manual 5--591.320 (A)(4)(b) 591.320 (A)(4)(b)

“I AM IN CHARGE OF THIS PROJECT…AND I AM A DARN GOOD COOK TOO!!!”

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)

RRecent Findings: Contract Item Paymentsecent Findings: Contract Item Payments

Payments Not Made to Contractors Every 35 Days: M.S. 471.425 Payments Not Made to Contractors Every 35 Days: M.S. 471.425 www.revisor.leg.state.mn.us/stats/471/425.htmlwww.revisor.leg.state.mn.us/stats/471/425.html

Contract Bid Item Mobilization Not Paid Properly: Specification Contract Bid Item Mobilization Not Paid Properly: Specification 20212021

RRecent Findings: Contract Item Paymentsecent Findings: Contract Item Payments

Payments Not Made to Contractors Every 35 Days: M.S. 471.425 Payments Not Made to Contractors Every 35 Days: M.S. 471.425 www.revisor.leg.state.mn.us/stats/471/425.htmlwww.revisor.leg.state.mn.us/stats/471/425.html

Contract Bid Item Mobilization Not Paid Properly: Specification Contract Bid Item Mobilization Not Paid Properly: Specification 20212021

Material on Hand, Work Order, and Supplemental Agreement PaymentMaterial on Hand, Work Order, and Supplemental Agreement Payments Documented s Documented in the Contract Bid Item Section of Partial Payments Rather Thanin the Contract Bid Item Section of Partial Payments Rather Than At The End of the At The End of the Partial Payment in a Separate Section: Specification 1501Partial Payment in a Separate Section: Specification 1501

Reduced Pay Factors Not Applied for Bituminous Mixture IndividuaReduced Pay Factors Not Applied for Bituminous Mixture Individual and Moving l and Moving Average Test Results Falling Outside Job Mix Formula Limits: BitAverage Test Results Falling Outside Job Mix Formula Limits: Bituminous Specification uminous Specification 2350/2360; Specifications 1503 and 15122350/2360; Specifications 1503 and 1512

ENGINEERS DECIDE WHO WILL TELL THE ACCOUNTANT TO PROCESS A PAYMEENGINEERS DECIDE WHO WILL TELL THE ACCOUNTANT TO PROCESS A PAYMENTNT

MATERIAL ON HAND PAYMENTSDetermine 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 Findings: Material on Hand PaymentsRecent Findings: Material on Hand Payments

Payments Not Supported by Invoice Submitted by Contractor: SpeciPayments Not Supported by Invoice Submitted by Contractor: Specification 1906fication 1906

Payments Made at Contract Price Rather Than Invoice Price: SpeciPayments Made at Contract Price Rather Than Invoice Price: Specification 1906fication 1906

Payment for Material on Hand not Decreased as Material is PlacedPayment for Material on Hand not Decreased as Material is Placed and Paid for as and Paid for as Completed Contract Quantities: Specification 1501Completed Contract Quantities: Specification 1501

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SUPPLEMENTAL AGREEMENT PAYMENTSEvaluate Controls Over Supplemental Agreement Payments

Proper Execution (Executed Supplemental Agreements)

Payment Made After Execution of Supplemental Agreement (Partial Payments, Executed Supplemental Agreements)

Recent Findings: Supplemental Agreement PaymentsRecent Findings: Supplemental Agreement Payments

Payments Made Before Supplemental Agreements are ExecutedPayments Made Before Supplemental Agreements are Executed

Supplemental Agreements Executed by Supplemental Agreements Executed by MnMn/DOT District State Aid Engineers Rather /DOT District State Aid Engineers Rather than by City or Countythan by City or County

Duplicate Payment for Supplemental Agreement ItemsDuplicate Payment for Supplemental Agreement Items

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 Findings: Environmental Requirements ComplianceRecent Findings: Environmental Requirements Compliance

Weekly Erosion Control Logs Not Forwarded by Contractors to ProjWeekly Erosion Control Logs Not Forwarded by Contractors to Project Engineers; ect Engineers; Work Order Not Written to Instruct Contractors to do so: ContracWork Order Not Written to Instruct Contractors to do so: Contract Proposal Special t Proposal Special Provisions Specification 1717 Provisions Specification 1717 www.dot.state.mn.us/tecsup/prov/pdf/sp2000.pdfwww.dot.state.mn.us/tecsup/prov/pdf/sp2000.pdf, page 68 of 391, page 68 of 391

Notice of Intent to Perform a Demolition Not Forwarded to MPCA 1Notice of Intent to Perform a Demolition Not Forwarded to MPCA 10 Days Prior to 0 Days Prior to Demolition: Asbestos NESHAP, 40 CFR Part 61.145Demolition: Asbestos NESHAP, 40 CFR Part 61.145www.www.gpoaccessgpoaccess..govgov//cfrcfr/retrieve.html/retrieve.html

Recent Findings: Environmental Requirements ComplianceRecent Findings: Environmental Requirements Compliance

Weekly Erosion Control Logs Not Forwarded by Contractors to ProjWeekly Erosion Control Logs Not Forwarded by Contractors to Project Engineers; ect Engineers; Work Order Not Written to Instruct Contractors to do so: ContracWork Order Not Written to Instruct Contractors to do so: Contract Proposal Special t Proposal Special Provisions Specification 1717 Provisions Specification 1717 www.dot.state.mn.us/tecsup/prov/pdf/sp2000.pdfwww.dot.state.mn.us/tecsup/prov/pdf/sp2000.pdf, page 68 of 391, page 68 of 391

Notice of Intent to Perform a Demolition Not Forwarded to MPCA 1Notice of Intent to Perform a Demolition Not Forwarded to MPCA 10 Days Prior to 0 Days Prior to Demolition: Asbestos NESHAP, 40 CFR Part 61.145Demolition: Asbestos NESHAP, 40 CFR Part 61.145www.www.gpoaccessgpoaccess..govgov//cfrcfr/retrieve.html/retrieve.html

Inspection of Building Materials Not Done and Documented Prior tInspection of Building Materials Not Done and Documented Prior to Building o Building Demolition: MN Rules Chapters 4620.3330 and 4620.3460 Demolition: MN Rules Chapters 4620.3330 and 4620.3460 http://www.revisor.leg.state.mn.us/arule/4620/3330.htmlhttp://www.revisor.leg.state.mn.us/arule/4620/3330.htmlhttp://www.revisor.leg.state.mn.us/arule/4620/3460.htmlhttp://www.revisor.leg.state.mn.us/arule/4620/3460.html

Improper Disposition of Hazardous Waste Building Demolition MateImproper Disposition of Hazardous Waste Building Demolition Materials: Contract rials: Contract Special ProvisionsSpecial Provisions

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 Audit is Meet With County Engineer at End of Week When Audit is Finished to Discuss Results of Audit for Specific Projects: Finished to Discuss Results of Audit for Specific Projects: Spring and Summer Spring and Summer

Results From 15Results From 15--18 Highway Construction Audits 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 MaterialsOffice of Construction and Innovative Contracting Office of Construction and Innovative Contracting State Aid for Local Transportation DivisionState Aid for Local Transportation DivisionMn/Dot Commissioner’s StaffMn/Dot Commissioner’s Staff

EXAMPLE OF ENGINEER’S ATTENTION SPAN AT AUDIT MEETING

Single Audit Report ProcessSingle Audit Report Process

Draft Report for Response Issued in December; Finding RecommendaDraft Report for Response Issued in December; Finding Recommendations tions Addressed to Addressed to MnMn/DOT Division Directors/DOT Division Directors

Finding Recommendations Related to County Projects Addressed to Finding Recommendations Related to County Projects Addressed to MnMn/DOT /DOT State Aid EngineerState Aid Engineer

Single Audit Report ProcessSingle Audit Report Process

Draft Report for Response Issued in December; Finding RecommendaDraft Report for Response Issued in December; Finding Recommendations tions Addressed to Addressed to MnMn/DOT Division Directors/DOT Division Directors

Finding Recommendations Related to County Projects Addressed to Finding Recommendations Related to County Projects Addressed to MnMn/DOT /DOT State Aid EngineerState Aid Engineer

Responses to Audit Findings Evaluated and Accepted by Mn/DOT DepResponses to Audit Findings Evaluated and Accepted by Mn/DOT Deputy uty CommissionerCommissioner

Final Report With Responses Issued in January is a Public DocumeFinal Report With Responses Issued in January is a Public Documentnt

Your QuestionsYour Questions

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