1. MnDOT AUDIT 2016 COUNTY HIGHWAY ACCOUNTANTS CONFERENCE ANNUAL FEDERAL CITY COUNTY AUDIT DISCUSSION

2. GOOD MORNING!

3. ANNUAL FEDERAL CITY COUNTY AUDIT OUTLINE 3 How Your Project Gets Selected For Audit 3 Davis-Bacon 3 Disadvantaged Business Enterprise (DBE) 3 Contract Item, Material on Hand, and Supplemental Agreement Payments 3 Material Testing 3 Environmental Compliance 3 Contract Administration 3 Federal City County Audit Report Process

4. HOW YOUR PROJECT GETS SELECTED TO PARTICIPATE IN THE AUDIT  Population of City County Highway Construction Project Payments for the State Fiscal Year  Goal: Audit One Project per MnDOT District (Potentially Multiple Projects for Metropolitan District ) Annually  Factors Influencing Selection: Year Last Audited, Number and Value of Projects for District/City/County, Project Size, Project Type  We Contact Your Office Approximately One Week In Advance, then Perform the Audit Onsite  Audits will be Starting in Late May or June (Past Audit Concerns: see Current Construction Reminders on State Aid Webpage)

5. THE AUDITORS PICK THE PROJECTS TO BE AUDITED NOT STATE AID FINANCE!

6. DAVIS-BACON See State Aid Manual, Chapter 6 Construction, V. Subletting and Labor Going Well  Federal and State Wage Decisions in Project Proposals  Contractors and Subcontractors Submit Payrolls Weekly  Review Payrolls for Prevailing Wage Compliance  Monthly Field Compliance Reviews  All Subcontractors Covered by a Request to Sublet  Poster Board Information is Complete

7. DISADVANTAGED BUSINESS ENTERPRISE (DBE) See State Aid Manual, Chapter 6 Construction, V. Subletting and Labor; DBE Special Provisions, 49 CFR 26.53 Needs More Attention  Engineer Completes Exhibit A Section E When 1/3 to 1/2 of DBE Work is Done  Document DBE Participation: Payrolls; Month End Trucking Reports; Invoices (Suppliers)  DBE Substitutions and Removals: Contractor Submits Written Request to MnDOT OCR and OCR Approves in Advance  DBE is Listed on MNUCP Database (MnDOT OCR Checks This)  Recommendation: Engineers Discuss DBE Requirements With Contractors at Preconstruction Meetings

8. CONTRACT ITEM, MATERIAL ON HAND, SUPPLEMENTAL AGREEMENT PAYMENTS See State Aid Manual, Chapter 6 Construction, VI. Payment Provisions and SALT Documentation Manual, IV. Contract Time and Changes Going Well  Documentation for most contract item payments (Check Mobilization Payment Correctness)  Material on hand payments (Continue to Monitor Invoices)  Supplemental Agreement Payments (After Execution)  Partial Payment Timeliness (every 35 days per M.S. 471.425 unless modified in special provisions)

9. MATERIAL TESTING See the Schedule of Materials Control (State Aid or MnDOT) and Project Proposal Special Provisions, State Aid Manual Chapter 6 Construction, III. Materials Going Well  Assess Measures Taken to Accomplish Compliance With Material Testing Requirements  Grading and Base Testing Requirements  Production/Testing Compliance for Concrete Mixes  Production/Testing Compliance for Bituminous Mixes  Apply Failing Materials Payment Reductions when Paying for Materials rather than at Project End

10. ENVIRONMENTAL COMPLIANCE See State Aid Manual Chapter 5.4 Plans and Proposals, VII. Other Project Documents, I. Required Documents and Permits for Federal Aid Projects Going Well  NPDES Permit Coverage and Weekly Erosion Control Inspections  Proper Disposition of Contaminated Soil and Treated Wood  MPCA Notifications for Asbestos Abatements, Bridge and Building Removals (copy to Engineer)

11. CONTRACT ADMINISTRATION See State Aid Manual Chapter 5.3 Agreements Going Well  Agency Agreement With MnDOT  Annual State Auditor/CPA Report: Compliance Supplement and Schedule of Expenditure of Federal Awards (in the back of the report)  Resolution Approving the Project Contract and Notification of Award to the Contractor  Right of Way Files and 1099 Forms for Payments to Landowners  Executed Contract and Payment and Performance Bonds

12. FEDERAL CITY COUNTY AUDIT REPORT PROCESS   Meet With County Engineer at Week’s End When the Project Audit is Finished to Discuss Results  Results from all City County Project Audits Combined and Evaluated in November  Meetings at MnDOT to Discuss Audit Results in November/December: Office of Materials Office of Materials Office of Civil Rights Office of Civil Rights Office of Environmental Stewardship Office of Environmental Stewardship Office of Construction and Innovative Contracting Office of Construction and Innovative Contracting State Aid Division State Aid Division MnDOT Commissioner’s Staff MnDOT Commissioner’s Staff  Draft Report for Response Issued in January/February; Finding Recommendations Addressed to MnDOT State Aid Engineer  Responses to Audit Findings Evaluated and Accepted by MnDOT Chief Operating Officer  Final Report With Responses Issued in March/April is a Public Document

13. ANOTHER EXCITING MEETING WITH THE AUDITORS

14. Thank You For Inviting Us! Dave Christensen Agency Policy Specialist 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