Financial Integrity Review and Evaluation (FIRE) Program Project Level Reviews
The Financial Integrity Review and Evaluation (FIRE) Program is the financial oversight and review program established for the Division offices. The FIRE Program is a review and oversight program that each Federal-aid Division Office is required to perform in support of the FHWA’s annual certification of internal and financial controls to support the financial statements. The program is conducted on a fiscal year basis.
In support of the FIRE program, the Area Engineers are expected to conduct a minimum of one Construction Contractor Payments Process Review on one federal-aid project per Region per fiscal year. This process includes activities for evaluating and testing the controls that are related to the financial aspects of construction contractor payments. The process should include any aspect that involves the preparation of the project estimate, the approval of and payment of estimates, the processing of change orders, and the completion and final acceptance of the work.
A recommended approach for this review is as follows:
1. The Area Engineer should interview the project staff and review the project diaries to obtain information to address the following issues.
· What controls are in place to assure contract quantities are processed according to the approved contract line items? Can project quantities exceed the line item levels? Examine how adjustments or other changes are handled.
· Evaluate the preparation and maintenance of project field records that are the basis for submitting quantities for payment. Evaluate the procedures for final payments. Is there an independent review or audit and at what stage?
· Verify the project diaries adequately support all time charges, work progress, time extensions, etc. When are they subjected to further review and approval?
· Verify the documentation related to materials, etc. received by the inspectors. How are rejected items handled?
· Verify field records provide the correct units of measurement and are documented in accordance with State specifications.
2. The Area Engineer should select a recent project pay estimate and select a representative number (12-15) of pay quantity items for review. Pay quantity items should be selected based on differing payment measures (e.g. each, lump sum, SQM, CM, etc.), which will provide information on how each type of measurement is processed.
3. With the assistance of NYSDOT project staff, a report should be generated from NYSDOT’s Computerized Engineer’s Estimate System (CEES) which details the IDR’s that support the quantities billed on the selected pay estimate. This report should contain the IR number and date, interim quantity, final quantity, estimate number, description location, item specification number, and the fiscal share.
4. Using the CEES report, trace the IDR number for the selected item(s) back to the actual IDR report filed in the project records. Review the individual IDR report for the following:
· Signature of inspector who prepared the IDR
· Signature of the EIC/Resident Engineer who reviewed the IDR
· Description of the work performed including item numbers, interim quantities, final quantity.
5. Check and confirm the quantities on the IDR with the information on the CEES report and the pay estimate. Also check the pay item against the standard specifications to ascertain that the pay items were properly calculated.
6. Report findings including any noted discrepancies or deficiencies and recommendations. A standard inspection report (Form FHWA 1446-A) can be used to report your findings. Coordinate the results of your review with HAM-NY.