Requirements

OFFICE OF EXTERNAL AUDITS
STATE OF CONNECTICUT
DEPARTMENT OF TRANSPORTATION

I. OVERVIEW

The purpose of this manual is to provide contract administrators responsible for obtaining audits from the Office of External Audits with an explanation as to the necessity of an audit, as well as the proper guidelines for requesting an audit.

The objective of our Office is to perform pre-award, grant and contract audits or reviews, at the request of the department’s administrating offices on a timely basis.

FHWA Closeout references pertain to projects determined by the Federal Highway Administration (FHWA) to be substantially complete. The FHWA places the projects on the Closeout list and ConnDOT has two (2) years to close out these projects with the FHWA. The Federal Billing Unit in ConnDOT is responsible for this function. Failure to meet this date could lead to a 10% citation (penalty) of total project costs against the State.

The purpose of our audits is to determine if amounts reported to the State are properly stated and in accordance with the terms of the agreement and applicable State and Federal Regulations. In addition, we will determine the payment status of the entity.

Also, the Federal Aid Policy Guide requires that audits be performed for projects that are receiving Federal Aid.

The standards for performing our audits are the Government Auditing Standards issued by the Comptroller General of the United States. Our audits are limited to the financial and compliance elements of the Government Auditing Standards generally using the Attestation Standards. We do not address the elements of economy and efficiency.

The term "timely basis" as used above, has been established as ninety (90) days from the date the request is received for items considered to be a department priority and nine (9) months for all other assignments.

The use of a ninety (90) day time frame for priorities is based upon past experience which indicates that it is the minimum time required to redirect our resources, schedule, perform and issue an audit report.

September 2004

II. GENERAL REQUIREMENTS

 The following is a list of items, which all administrating units MUST address when requesting an audit:

A. Request audits in a timely manner (timely manner meaning as soon as the project has been accepted by ConnDOT or the final billing by the Consultant, Municipality, or other third party has been received and approved).

Requesting of audits in a timely manner provides benefits to both the contract administrators and Office of External Audits.

Some of the benefits are summarized below:

Contract Administrator

1. Ability to close out the project sooner and free up funds for use on other projects.

2. Final payments to consultants, contractors and municipalities can be made within a reasonable time period.

3. Federal Closeout deadlines will more easily be met thus eliminating any penalty imposed by the FHWA.

Office of External Audits

1. Audit records and key personnel from both the Department and the auditee familiar with the project will be available to answer/assist us with any questions.

2. Allows us the ability to more easily meet FHWA Closeout deadlines as per #3 above.

3. Allows this Office to schedule multiple audits of the same company, which reduces travel time/costs and increases the efficiency of our operations.

B. It is recommended that the contract administrating units maintain all correspondence, billings and supporting documentation sent by auditee. Very often companies destroy or lose this information, making it difficult or impossible to perform the audit. In addition, billing adjustments made by ConnDOT are not always adjusted on the Company’s own records; therefore, it is necessary that this office be able to review the contract administrating unit’s files at the time of our audit.

C. When submitting an audit request, the contract administrator should inform the Office of External Audits of:

1. Any specific concerns you have which need to be addressed during our audit.

2. Any outstanding issues (i.e. prior audit findings and recommendations, unpaid balances, etc.) with the company or municipality that might affect the outcome of the audit.

D. Notify the Office of External Audits when there are additional billings and/or payments made subsequent to the audit request. Copies of these must be forwarded to this office for inclusion in our audit.