Audit 297336

Capital Fund #14.872 Finding 2023-001-Contractor Payments-Special Tests Criteria and Condition Federal regulations require that monitoring of construction or rehabilitation type expenses be documented in writing. Monitoring notes of construction progress, lack of progress, or issues such as contractor delay must be timely made and available for third parties. There are not required forms or format. However, the more they correlate to field reports prepared by architects, the more reliable they are. In addition, contractors must present proof of insurance before they are allowed to work on Authority jobs. Context In the audit year, approximately $71,897 was paid in approximately twenty payments to one contractor. It appears there were no written monitoring notes made on the various type of rehab work. In addition, it appears that the contractor did not present proof of contractor insurance of bond to Authority management. Cause Apparent oversight. Effect Federal regulations were not complied with. In addition, assurance was not as strong as necessary that the work was properly done and in accordance with specifications. Management attests that they timely review the work. However, written documentation is required. In addition, the Authority would likely be liable if the contractor or his employees were injured on the job. Questioned Costs NoneRecommendation Written monitoring reports need to be made on each job. These notes do not need to be extremely detailed. For small type jobs, a punch list type of review with a few words, and initials and dates of the reviewer will suffice. View of Responsible Official I will comply with the auditor’s recommendation.

Capital Fund #14.872 Finding 2023-001-Contractor Payments-Special Tests Criteria and Condition Federal regulations require that monitoring of construction or rehabilitation type expenses be documented in writing. Monitoring notes of construction progress, lack of progress, or issues such as contractor delay must be timely made and available for third parties. There are not required forms or format. However, the more they correlate to field reports prepared by architects, the more reliable they are. In addition, contractors must present proof of insurance before they are allowed to work on Authority jobs. Context In the audit year, approximately $71,897 was paid in approximately twenty payments to one contractor. It appears there were no written monitoring notes made on the various type of rehab work. In addition, it appears that the contractor did not present proof of contractor insurance of bond to Authority management. Cause Apparent oversight. Effect Federal regulations were not complied with. In addition, assurance was not as strong as necessary that the work was properly done and in accordance with specifications. Management attests that they timely review the work. However, written documentation is required. In addition, the Authority would likely be liable if the contractor or his employees were injured on the job. Questioned Costs NoneRecommendation Written monitoring reports need to be made on each job. These notes do not need to be extremely detailed. For small type jobs, a punch list type of review with a few words, and initials and dates of the reviewer will suffice. View of Responsible Official I will comply with the auditor’s recommendation.