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Order 45601a.htm



This Appendix contains sample review guides for conducting the type of process reviews called for by the FIRE Order. Division offices may revise the review guides to suit the specific scope of their review. The reviewer should also incorporate the evaluations and analyses performed by others, such as State auditors, OIG, etc.

The following review programs are currently provided. Additional review guides may be developed, and will be included at that time.

Project Authorization Process Review Guide

  1. Scope. This process consists of activities and controls related to the proper authorization of Federal-aid highway projects to ensure that Federal funds are obligated in accordance with Federal requirements. As determined appropriate, work performed by others may be relied upon and incorporated into the review. The process should include an examination of project accounting related documents, cost estimates, availability of proposed Federal, State/local funding, appropriate State or Federal approvals.

  2. Authorities

    1. 23 United States Code (U.S.C.) 102, 106, 118, 120, and 320.

    2. 23 Code of Federal Regulations (CFR) 1, 630.

    3. 49 CFR 18.

    4. Office of Management and Budget (OMB) Circular A-87.

    5. Grant Anticipation Revenue Vehicles (GARVEE) Bond Guidance, dated March 25, 204.

    6. Tapered Match on Federal-aid Projects, dated July 7, 1999.

  3. Review Plan. The following are questions/instructions to consider for the review plan:

    1. Are the State and Division operating according to the Oversight and Stewardship Agreement? Does it clearly define State and FHWA responsibility in executing the Federal-aid highway program?

    2. Is the project included on the State Transportation Improvement Program (STIP)?

    3. Are all required certifications (such as right-of-way certification) on file?

    4. Examine the procedures for authorizing Federal-aid for full oversight projects and State administered projects. Are critical roles and responsibilities clearly defined?

    5. What controls provide assurance that costs are incurred after authorization? Test a project sample size to determine if costs were incurred prior to authorization. Is FHWA provided notice of all costs incurred prior to authorization?

    6. How does the State and FHWA assure the full oversight and State administered projects are in the STIP and funded accordingly?

    7. Verify that costs are billed at the appropriate Federal share. What levels exist to validate project is eligible for proposed funding category?

    8. Examine State organization and delegations of authority to determine if authority of State approving officials is appropriately located in the State organization.

    9. How does the State and division ensure copies of the authorizing documents are available? Verify State procedures for records retention meet or exceed FHWA requirements.

    10. Will the proposed project activity or undertaking meet the requirements needed for the actual construction of the highway that is eligible for assistance or reimbursement? If a single agreement is executed for all phases, are the costs set up to be control by phase?

    11. What assurances or controls are in place verify a project agreement is prepared for each Federal-aid project? Is there a different process for approval of project agreement modifications?

    12. Examine the procedures that establish/convert debt-financed (GARVEE) projects. Does the State include a debt service schedule in the project agreement when a debt service project is authorized? Is the estimated Federal share of debt-service costs included in the STIP?

    13. If tapered match is authorized, was justification provided by the State? Is the authorization noted in the project agreement?

    14. Is FHWA advised of funds needed for a final accounting of the project when it is substantially complete or open-to-traffic? What impact are these needs given by the State and FHWA in funding other projects?

Construction Contractor Payments Process Review Guide

  1. Scope. This process includes activities for evaluating and testing the controls that are related to the financial aspects of construction contractor payments. As determined appropriate, work performed by others may be relied upon and incorporated into the review. 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.

  2. Authorities

    1. 23 U.S.C. 106, 112, 114, 120, and 121.

    2. 23 CFR 1, 630 and 635.

    3. 49 CFR 18.

    4. OMB Circular A-87.

  3. Review Plan. The following are questions/instructions to consider for the review plan:

    1. What is the process for ensuring that the contract award is by competitive means versus another approved method?

    2. What is the process for ensuring that the plans, specifications, and estimates have been approved prior to the State requesting project authorization to obligate funds?

    3. What controls are in place to ensure 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.

    4. 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?

    5. Verify the project diaries adequately support all time charges, work progress, time extensions, etc. When are they subjected to further review and approval?

    6. How do you determine if required certifications are accepted/approved and maintained?

    7. How is the States responsibility for project supervision determined and is prior Division approval required? What is the State procedure for project supervision?

    8. Verify the documentation related to materials received by the inspectors. How are rejected items handled?

    9. Verify field records provide the correct units of measurement and are documented in accordance with the State specifications.

    10. In what areas do change orders occur most frequently? Are change orders approved at the project or central office level? What constitutes a change order versus a design error?

    11. Evaluate the process of awarding the contract and acceptance to preparing the project agreement. Does the project agreement contain provisions for State funds?



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