TECHNOLOGY PROGRAM
TECHNOLOGY PROGRAM
State Authorization: / N.C.G.S Article 2B of Chapter 136N. C. Department of Transportation
Public Transportation Division (PTD)
Debra G. Collins, Director
Public Transportation Division
N.C. Department of Transportation
1550 Mail Service Center
Raleigh, NC 27699-1550
(919) 707-4687
(919) 733-1391
/ Address Confirmation Letters To
Wayne Davenport, Lead Auditor, CICA, CFS
Single Audit Compliance Unit
N. C. Department of Transportation
1507 Mail Service Center
Raleigh, N.C. 27699-1507
(919) 707-4581
Fax (919) 715-2710
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 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 (“Technology Program”), DOT number (“DOT-10”), and WBS number on the Schedule of Expenditures of Federal and state Awards. This information is available from the agreement with NCDOT; program name and WBS element 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-10”.
I. PROGRAM OBJECTIVES
The North Carolina General Assembly has a long history of approving state funds to support the implementation of technologies by local public transportation systems. Beginning in 1998, the appropriation was $1.5 million for technology assistance, including $1 million for urban areas and $500,000 for rural areas was appropriated in 2008. The state technology program provides funds to local transportation systems to purchase or upgrade existing computer equipment, file servers, software, printers, telephone systems, mobile data terminals, automatic vehicle locators and other technologies that will enable systems to improve customer service and operate more efficiently. The Community Transportation program covers technology expenses under a different funding source than Urban Advanced Technology. Community Transportation expenses consists of printers, laptops, computers, scanners, and central processing units (servers). These expenses are covered under an 80%, 10%, 10% allocation.
The Statewide Technology Plan developed annually by the North Carolina State University, Institute for Transportation Research and Education, provides guidance in the deployment of various technology at the system level. Starting with FY2003 technology grants, replacement computers and related peripheral equipment will not be funded from the technology program. Beginning in FY2007, the rural technology program was administered as a component of the Rural Capital Program for community transportation systems.
II. PROGRAM PROCEDURES
Local recipients are lead transportation agencies including local governments, transportation authorities, private nonprofit organizations, regional, small urban, urban, and consolidated systems for Urban Advanced Technology. Categories of eligible technologies are based on factors including, but not limited to, the transportation system’s size (number of vehicles operated), organizational structure, type(s) of service provided and number of passenger trips provided annually.
To receive funding, the designated applicant agency for the urban, regional or rural transit system must submit an application for technology funds to the Public Transportation Division. The request is reviewed by Public Transportation Division staff and, if approved, presented to the North Carolina Board of Transportation for funding approval. Following BOT approval, the applicant agency receives the approved project budget, instructions for ordering the equipment and receiving reimbursement by the department, and agreement between NCDOT and the applicant for execution and return.
III. COMPLIANCE REQUIREMENTS
1. ACTIVITIES ALLOWED OR UNALLOWED
Compliance Requirement - Funds must be expended in a manner consistent with the application and budget.
Audit Objective – Determine that funds were expended properly and for the specified program.
Suggested Audit Procedure
1. Ascertain that services and expenditures conform to the project budget.
2. Test expenditures and related records for compliance with the project budget.
3. Determine whether state awards were expended.
3. CASH MANAGEMENT
Compliance Requirement - The subrecipient can incur costs and request reimbursement from the department or request payment of the costs in advance upon receipt of a vendor invoice. If the subrecipient receives payment of state funds in advance of incurring the cost, the funds must be paid to the vendor within three (3) days of receipt from the department.
Audit Objective – Determine if advanced funds were disbursed within three (3) days.
Suggested Audit Procedure - Ascertain that funds received in advance of incurring the cost were disbursed within three (3) days of receipt from NCDOT.
4. Conflict of Interest Policy
Compliance Requirement – N.C.G.S. 143C-6-23(b) requires each non-state entity eligible to receive state funds to have a conflict of interest policy which addresses conflicts that may arise when members of its governing body or its managing employees are involved in the disbursement of state funds. The entity is required to have a copy of their entity’s policy on file with the disbursing state agency before any funds are disbursed; this policy shall be approved by the entity’s governing board and a notarized statement of the board’s action shall be attached. All members of the board and management shall be familiar with and follow the policy and the legislation. The entity should have written procedures of how the conflict of interest policy is enforced. Also note: N.C.G.S. 14-234 - Public officers or employees benefiting from public contracts; exceptions.
Audit Objective - Determine if the policy statement has been provided to the
disbursing state agency, to current members of the board and management and efforts
are made to follow the policy.
Suggested Audit Procedure
1. Obtain a copy of the policy and transmittal letter to the agencies disbursing state funds to the nonprofit entity.
2. Verify the existence and enforcement of the entity’s procedures.
7. 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 grantee.
Audit Objective – Determine if expenses are 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 system requested eligible state share.
12. REPORTING
1. Financial Reporting
Compliance Requirement - The timeframe to procure the approved budget items and request reimbursement or advance payment from the department is specified in the agreement and budget transmittal letter. Eligible projects costs should be billed to the department no later than the quarter in which they were incurred.
Audit Objective – Determine if the approved budget items were ordered and received within the required timeframe or that a letter from NCDOT extending the period of performance is on file, and that costs were invoiced in a timely manner.
Suggested Audit Procedures
1. Examine the approved project budget and any revisions and amendments approved by NCDOT.
2. Trace amounts reflected in requests for reimbursement or advance payment to underlying accounting records.
3. Ascertain total project costs, including those eligible for NCDOT participation
4. Verify that the equipment purchased is on the agency’s fixed asset inventory.
2. 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:
https://www.ncgrants.gov/NCGrants/Regulations.jsp
https://www.ncgrants.gov/NCGrants/PublicReportsRegulations.jsp
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.
3. MBE/WBE/HUB Reports
Compliance Requirement - Grantees must submit quarterly MBE/WBE/HUB Reports of Awards and Report of Payments documenting actual utilization of 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 noncertified firms is not allowed.
C-4 DOT-10 5