CHAPTER 6

RESOLVING FEDERAL AUDIT FINDINGS

Purpose. The purpose of this chapter is to establish a process that ensures prompt and adequate resolution of findings reported by the Department of Transportation's (DOT's) Office of Inspector General (OIG) and the Government Accountability Office (GAO).
Method
1. Division offices will be notified when findings are issued that impact their Divisions or States.
2. The division offices will work with Washington Headquarters to address the findings in accordance with the requirements and timeframes established in DOT Order 8000.1C, Office of Inspector General Audit and Investigation Report Findings, Recommendations, and Follow-up Action, 1989.
Results. The division office will maintain a record of each management decision and actions to resolve audit findings.

CHAPTER 7

CERTIFYING THE RESULTS OF THE FIRE PROGRAM

Purpose. The purpose of this chapter is to describe the process for the division office to annually certify the results of the FIRE Program and to satisfy the requirements of the FMFIA, sections 2 and 4.
Method/Results. In accordance with the FIRE Order, the Division Administrator shall annually certify the results of the FIRE Program (or validate that annual certification), and report all instances of material non-conformance using the Standard Working Papers.

CHAPTER 8

IMPLEMENTATION AND FOLLOW-UP

Implementation
1. Simply conducting a review and writing a report does not produce improvements. The payoff lies in implementing the improvements identified during the process of performing a review. The following are some key points to consider in preparing an implementation plan:
  1. Involve State officials in the review process to avoid surprises.
  2. Break down recommendations into separate, achievable items.
  3. Develop a viable implementation strategy and timetable.
  4. Emphasize why the changes need to be made and the benefits that will accrue.
  5. Consider the manpower and resource impacts and time constraints.
2. The implementation plan should include a list of recommendations with the following information given for each:
  1. A description of actions necessary for implementation.
  2. Identification of the responsible office and/or person.
  3. The date by when each action should be completed.
3. Leave space in the implementation plan for comments on the actions that are taken (i.e., adopted with modifications, not adopted). These comments are the record of agreement and, as a whole, will serve as a basis for monitoring the results of improvements through the follow-up phase.
Follow-up
1. Follow-up should be performed in a timely manner to determine if the process has been implemented and the desired results have been achieved. An independent party or group such as the State's internal audit staff or as part of next year's division office review can accomplish the follow-up.
2. FIRE Program activity should not be considered complete until all actions have been taken which either result in improvements or correct identified deficiencies. Results of the follow-up should be documented and management should be informed of the timeliness and quality of the resolution actions.
Example System The following is an example of a systematic follow-up process that division offices may wish to consider.
Nevada Division System – MARCS (locally supported)

MANAGEMENT ANALYSIS REPORTS CONTROL SYSTEM (MARCS)
Status of all Findings in System
As of January 20, 2006

Control Number:	Report Title:	Date Report Issued:	Source:
03-NV-02	Area 1 – Right of Way Accounting (NDOT) Findings and Recommendations (2)	8/8/2003	HFM-NV

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FINDING 1 CLOSED	NO WRITTEN RIGHT OF WAY ACCOUNTING PROCEDURAL GUIDELINES
RECOMMENDATION	DEVELOP A RIGHT OF WAY DIVISION ACCOUNTING PROCEDURES DESK MANUAL.
ACTIONS TO RESOLVE	NDOT STATUS REPORT DATED 9/29/03; CORRECTIVE ACTION PENDING NDOT STATUS REPORT DATED 6/02/04; CORRECTIVE ACTION PENDING NDOT STATUS REPORT DATED 10/1/04; PROJECTED COMPLETION DATE DECEMBER 31, 2004 1/1/05 ACCEPTABLE NDOT RESPONSE; FINDING WILL BE DELETED FROM SYSTEM
FINDING 2 PENDING	FRAGMENTATION OF RIGHT OF WAY VENDOR BILLINGS WITHIN NDOT ORGANIZATION
RECOMMENDATION	REVISE PROCEDURES TO REQUIRE THE SUBMISSION OF ALL VENDOR BILLINGS DIRECTLY TO THE CENTRAL ACCOUNTING OFFICE
ACTIONS TO RESOLVE	NDOT STATUS REPORT DATED 9/29/03; CORRECTIVE ACTION PENDING NDOT STATUS REPORT DATED 6/02/04; PROJECTED COMPLETION DATE JUNE 2005. NDOT STATUS REPORT DATED 10/1/04; NO CHANGE IN STATUS NDOT STATUS REPORT DATED 01/1/05; NO CHANGE IN STATUS NDOT STATUS REPORT DATED 04/1/05; PROJECTED COMPLETION DATE DECEMBER 30, 2005. NDOT STATUS REPORT DATED 10/1/05; PROJECTED COMPLETION DATE DECEMBER 30, 2005. NDOT STATUS REPORT DATED 1/1/06; PROJECTED COMPLETION DATE JUNE 30, 2006.

Control Number:	Report Title:	Date Report Issued:	Source:
03-SA	FY 2003 Single Audit Report (NDOT) Findings and Recommendations (1)	6/24/2004	NV-LCB

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FINDING 03-22 CLOSED

LACK OF SUPPORTING DOCUMENTATION FOR TWO PAYMENTS MADE TO A SUBRECEIPIENT – COSTS QUESTIONED $300,000 (FTA)

RECOMMENDATION

NDOT IMPLEMENT PROCEDURES TO ENSURE AMOUNTS
CHARGED TO FEDERAL PROGRAMS ARE ADEQUATELY
DOCUMENTED IN ORDER TO ENSURE ALLOWABILITY OF COSTS

ACTIONS TO RESOLVE

NDOT STATUS REPORT DATED 3/9/04; NEW PROCEDURES IMPLEMENTED FOR PAYMENTS TO SUBRECIPIENTS. THERE ARE NOW MORE LEVELS OF REVIEW, PRIOR TO PAYMENTS BEING MADE, AND ADVANCE PAYMENTS ARE NO LONGER ALLOWED. THE STATE MANAGEMENT PLAN IS BEING REWRITTEN WITH CLEAR GUIDELINES EACH SUBRECEIPIENT MUST FOLLOW IN SUBMITTING AN INVOICE COMPLETE WITH ALL BACKUP DOUCMENTATION PRIOR TO PAYMENT. CLOSURE OF THIS FINDING IS DEPENDENT ON ACCEPTANCE OF CORRECTIVE ACTION BY THE LCB.

1/5/05 ACCEPTABLE NDOT RESPONSE; FINDING WILL BE DELETED FROM SYSTEM.

Control Number:	Report Title:	Date Report Issued:	Source:
05-NV-01	Area 2 – Federal-aid Billing System (NDOT) Findings and Recommendations (3)	5/27/2005	HFM-NV

FINDING 1 PENDING	NO COMPREHENSIVE, UNIFIED POLICY AND PROCEDURES MANUAL
RECOMMENDATION	EVALUATE CURRENT BILLING INTERNAL CONTROL PROCESSES, AND DOCUMENT THE FULL RANGE OF POLICIES AND PROCEDURES IN A UNIFIED MANUAL.
ACTIONS TO RESOLVE	ORIGINAL REPORT DATED 5/27/05; RESPONSE DUE 8/1/2005 NDOT STATUS REPORT DATED 8/1/05; PROJECTED COMPLETION DATE DECEMBER 31, 2005. NDOT STATUS REPORT DATED 10/1/05; PROJECTED COMPLETION DATE DECEMBER 31, 2005. NDOT STATUS REPORT DATED 1/1/06; PROJECTED COMPLETION DATE MARCH 31, 2006.
FINDING 2 PENDING	NO OPERATIONAL AUDIT OR MANAGEMENT ANALYIS OF BILLING SYSTEM ON A PEROIDIC, ROUTINE BASIS
RECOMMENDATION	ESTABLISH A PROCEDURE AND ASSIGN RESPONSIBILITY FOR THE PERIODIC OPERATIONAL AUDIT OR OTHER INTERNAL CONTROL EVALUATION OF BILLING SYSTEM CONFORMITY WITH APPROVED POLICIES AND OPERATIONAL GUIDELINES.
ACTIONS TO RESOLVE	ORIGINAL REPORT DATED 5/27/05; RESPONSE DUE 8/1/2005 NDOT STATUS REPORT DATED 8/1/05; PROJECTED COMPLETION DATE OCTOBER 31, 2005. NDOT STATUS REPORT DATED 10/1/05; PROJECTED COMPLETION DATE OCTOBER 31, 2005. NDOT STATUS REPORT DATED 1/1/06; PROJECTED COMPLETION DATE MARCH 31, 2006.
FINDING 3 CLOSED	INCONSISTENT RECONCILIATION OF CURRENT BILLING SYSTEM ON A REGULAR BASIS
RECOMMENDATION	ESTABLISH CRITERIA, SET SCHEDULES, AND PERFORM BILLING RECONCILIATIONS ON A ROUTINE BASIS; RETAIN DOCUMENTATION.
ACTIONS TO RESOLVE	ORIGINAL REPORT DATED 5/27/05; RESPONSE DUE 8/1/20058/1/05 ACCEPTABLE NDOT RESPONSE; FINDING WILL BE DELETED FROM SYSTEM.

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