Overview
In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor (OSA) has conducted a performance audit of certain activities of the Massachusetts Department of Transportation (MassDOT) for the period September 3, 2015 through June 30, 2020.
We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.
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Objective |
Conclusion |
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Yes |
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Yes |
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No; see Finding 1 |
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Yes |
To achieve our objectives, we gained an understanding of MassDOT’s internal control environment related to the objectives by reviewing policies and procedures, as well as conducting inquiries with MassDOT officials. We evaluated the design, and tested the effectiveness, of controls over the approval of police detail payments.
In addition, we performed the following procedures to address our audit objectives.
Substantial Completion
We determined whether MassDOT sent to the general contractor, within 65 days after substantial completion, a substantial completion estimate documenting that the project had met all requirements to be considered substantially complete in accordance with Section 39G of Chapter 30 of the General Laws by the planned substantial completion date in the general contractor’s project contract (June 19, 2020).
To determine this, we inspected a contract quantity estimate (CQE), signed by both the general contractor and MassDOT, documenting that the general contractor had substantially completed Contract 86774 on June 14, 2020, and that the work required by the contract was complete except work with a contract price of less than 1% of the adjusted total contract price. Additionally, we reviewed a Completion of Contract Items list, as of the substantial completion date, and recalculated the total dollar amount of work completed to determine whether work with a contract price of 1% or less of the adjusted total contract price remained to be completed.
Substantial Completion
We determined whether MassDOT sent to the general contractor, within 65 days after substantial completion, a substantial completion estimate documenting that the project had met all requirements to be considered substantially complete in accordance with Section 39G of Chapter 30 of the General Laws by the planned substantial completion date in the general contractor’s project contract (June 19, 2020).
To determine this, we inspected a contract quantity estimate (CQE), signed by both the general contractor and MassDOT, documenting that the general contractor had substantially completed Contract 86774 on June 14, 2020, and that the work required by the contract was complete except work with a contract price of less than 1% of the adjusted total contract price. Additionally, we reviewed a Completion of Contract Items list, as of the substantial completion date, and recalculated the total dollar amount of work completed to determine whether work with a contract price of 1% or less of the adjusted total contract price remained to be completed.
EWOs
We reviewed all 21 EWOs processed for work done on the project during the audit period. We determined whether they complied with MassDOT’s SOPs for EWOs. Specifically, we reviewed them to determine whether they contained the following: the scope and necessity of the work to be performed, the estimated cost, the effect on the estimated contract completion date, a statement of whether a review by an environmental engineer was necessary, a statement assessing alternatives to the proposed work, a statement on whether the work should have been anticipated and how it could be avoided in the future, and a statement on whether MassDOT should pursue reimbursement of costs. We also determined whether EWOs were approved by MassDOT officials and whether the general contractor documented its agreement to perform the work that was necessary according to the EWOs.
From the 18 EWOs with labor charges, we selected a nonstatistical, judgmental sample of 12 EWOs and verified the charges by comparing amounts charged for each worker to general contractor and/or subcontractor payroll data.
Police Details
We selected a nonstatistical, random sample of 20 of 98 CQEs that showed police detail expenses paid during the audit period. To ensure that MassDOT was billed appropriately by the general contractor for police details for this project, we compared police detail hours worked and amounts paid from the sampled CQEs to the police detail hours worked and amount paid from the resident engineer’s police time log report. We also compared police detail hours worked according to field inspection reports to those on the paid police department invoices according to each CQE.
Commodity Price Adjustments
We selected a nonstatistical, judgmental sample of 28 price adjustments from a population of 118. Our sample included at least one commodity of every type that was subject to price adjustments (gasoline, diesel fuel, asphalt, concrete, and steel) for Contract 86774. For our sample, we verified the accuracy of MassDOT’s Monthly Price Adjustment Calculation Spreadsheets, which MassDOT uses to compute the price adjustments on its CQEs. We also verified that MassDOT properly calculated and processed price adjustments for each commodity used for our sample.
When sampling was used, we used nonstatistical sampling methods and therefore did not project the results of our testing to the population.
Data Reliability
MassDOT uses a system called Site Application Module (SAM) to hold reports and other records related to this contract. MassDOT provided us with CQEs from SAM so we could review project cost reimbursements to the general contractor, which include police detail cost reimbursements. To determine the reliability of the data in SAM, we gained an understanding of SAM and its controls, interviewed information technology personnel, reviewed information security policies and procedures, and tested access controls over SAM. Further, we reconciled all CQEs in SAM to amounts reported in the Massachusetts Management Accounting and Reporting System (MMARS).
To conduct the above tests, we relied on work performed by OSA in two separate projects completed in 2014 and 2018 that focused on testing certain information system general controls in MMARS.
MassDOT also reports commodity price adjustments in SAM. We selected a judgmental sample of 10 commodity price adjustments from reports generated through SAM and traced them to CQEs for agreement. Additionally, we selected a judgmental sample of 10 CQEs that contained commodity price adjustments and traced them to the commodity price adjustment reports for agreement.
Additionally, MassDOT reports EWOs in SAM. We selected a judgmental sample of 10 of the 21 EWOs processed for work done on the project during the audit period and traced them to CQEs for agreement. We also selected a judgmental sample of 10 CQEs that contained EWOs and traced them to the processed EWOs for agreement.
MassDOT reports payments for police details on this contract in an Excel spreadsheet referred to as the Police Timebook. We verified that all police detail payments in the Police Timebook reconciled to CQEs. Additionally, we traced a sample of 22 police detail work days to police department billings.
Based on the results of the data reliability procedures performed, we determined that the data were sufficiently reliable for the purposes of our audit work.
| Date published: | October 19, 2021 |
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