FACILITY IMPROVEMENT PROGRAM APRIL 2017

FACILITY IMPROVEMENT PROGRAM

State Authorization: /

N.C.G.S. Article 2B, Chapter 136

N. C. Department of Transportation
Public Transportation Division (PTD)

Agency Contact Person - Program
Debra G. Collins, Director Public Transportation Division
N.C. Department of Transportation
1550 Mail Service Center
Raleigh, NC 27699-1550
Phone: (919) 707-4684
Fax: (919) 733-1391
/
Address Confirmation Letters To
Pam Nelms
N.C. Department of Transportation
Financial Management Division
1514 Mail Service Center
Raleigh, N.C. 27699-1514
(919) 707-4245
Fax (919) 715-8718

The auditor should not consider the Supplement to be “safe harbor” for identifying audit procedures to apply in a particular engagement, but the auditor should be prepared to justify departures from the suggested procedures. The auditor can consider the supplement a “safe harbor” for identification of compliance requirements to be tested if the auditor performs reasonable procedures to ensure that the requirements in the Supplement are current. The grantor agency may elect to review audit working papers to determine that audit tests are adequate.

The Single Audit Compliance Unit of the NCDOT Office of Inspector General (OIG) reviews all single audits, financial audits, and management letters of all “grantees.” We are looking at both the presentation (information as to program, pass-through and state funding, NCDOT identification numbers) and the dollar amounts presented versus our records. Any reports not received will be requested.

Grants must be properly identified by program name (“Facility Improvement Program”), DOT number (“DOT-2”), and WBS number on the Schedule of Expenditures of Federal and State Awards. This information is available from the agreement with NCDOT; program name is in the second/third paragraph while the WBS number is on the upper right hand corner of the first page. On NCDOT’s confirmation from the Grant Master List (GML), these moneys are shown as DOT number “DOT-2.”

I.PROGRAM OBJECTIVES

Grants are made under the state facility improvement program to provide funds to local transportation systems in rural areas to purchase or renovate facilities for administrative and/or operating use. The facility project may be funded through a separate grant agreement or as a part of the annual Community Transportation Program budget. If the project does not receive federal funding assistance for facility construction or renovation, the source of funds is the State Facility Improvement Program.

II.PROGRAM PROCEDURES

Local recipients are lead transportation agencies including local governments, transportation authorities and nonprofit organizations.

III.COMPLIANCE REQUIREMENTS

1.ACTIVITIES ALLOWED OR UNALLOWED

Compliance Requirement - Funds must be expended in a manner consistent with the project application and budget.

Audit Objective – Determine if funds were expended properly.

Suggested Audit Procedure

1. Ascertain that expenditures conform to the project budget.

2. Test expenditures and related records for compliance with the project budget.

  1. ALLOWABLE COSTS/COST PRINCIPLES

The North Carolina Department of Transportation, through its Administrative Code Book, has adopted the cost/cost principles outlined in 2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, it may be found at eCFR — Code of Federal Regulations

Compliance Requirement - The construction/renovation project must comply with state statutes governing construction or renovation of facilities purchased with public funds.

Audit Objective – Determine if project approval to proceed with the renovationor construction activities were received prior to construction.

Suggested Audit Procedure - Ascertain that the grantee received written approval to proceed with the construction and renovation projects from the Public Transportation Division prior to incurring costs. Auditor should report amounts received from NCDOT as well as expenditures.

  1. CONFLICT OF INTEREST: G.S. 14-234 includes a general prohibition against any public official having a personal interest in any contract to which he/she is a party in his/her official capacity. Any other statute or agency policy that applies should be tested as part of this compliance requirement.
  1. MATCHING, LEVEL OF EFFORT, EARMARKING

Matching

Compliance Requirement - There is a ten percent (10%) local match requirement for this program. Any costs in excess of the approved project budget are the responsibility of the recipient.

Audit Objective – Determine whether expenditures were allowable and applied correctly.

Suggested Audit Procedure

1.Compare the total reported project cost with the expenditure category to determine the allowability and unacceptability of claimed expenses.

2. Determine whether expenditures are supported by the project budget and were applied correctly.

3. Determine whether local funds were applied correctly.

8.PERIOD OF AVAILABILITY OF STATE FUNDS

Compliance Requirement - The eligible project costs are to be completed within the specified timeframe unless written authorization was requested and received from NCDOT prior to the end of the period of performance specifying the new contract end date.

Audit Objective – Determine if costs were expended according to agreement and if a period of performance approval letter is on file if the project exceeded the initial contract period.

Suggested Audit Procedure - Determine whether project expenses occurred within the period of performance specified in the project agreement or an approved written extension of the period of performance from NCDOT is on file.

12.REPORTING

1. Non-governmentals – Reports made by non-State entities

Compliance Requirement – North Carolina General Statute 143C-6-23 “Use of State Funds by Non-State Entities,” and North Carolina Administrative Code Chapter 9, Subchapter 03M “Uniform Administration of State Grants” addresses reporting requirements for non-governmental entities.

These regulations along with reporting forms may be accessed at:

Audit Objective – Determine applicable reporting requirements.

Suggested Audit Procedure

1. Determine if the organization is subject to G.S. 143C-6-23.

2. Determine what type of filing/report should be made with the NCDOT.

2. Compliance Requirement - Grantees must submit quarterly MBE/WBE/HUB Reports of Awards Payments documenting actual utilization Minority Business Enterprise, Women Business Enterprise and Historically Underutilized Business Enterprise as specified in all grant agreements executed after October 1, 2006. To monitor the progress of the MBE/WBE/HUB program, recipients are required to submit quarterly reports based on a record keeping system.

Audit Objective - Determine MBE/WBE/HUB reports are supported by adequate documentation.

Suggested Audit Procedure

1. Review grantee’s MBE/WBE/HUB contract expenditures as defined in the grant agreement and the NCDOT Public Transportation Division Disadvantaged Business Enterprise External Procedures.

2. Review the reports and trace the information to underlying data to determine completeness and accuracy.

3. Determine that for all participation amounts reported, the firms have been certified and that the certification is current. Participation by non-certified firms is not allowed.

C-4DOT-21