FHWA/MoDOT Partnering Agreements

FINANCIAL 2

March 2011

I. Purposes of this Agreement

The purpose of this Agreement is to set forth the general terms and conditions for collaboration in financing between the FHWA and MoDOT Resource Management for the purpose of enhancing the quality and effectiveness of the existing FHWA/MoDOT partnership so that partners can work better at achieving mutual transportation priorities. This Agreement applies to the MoDOT staff and the staff of the FHWA Missouri Division Office responsible for the management/oversight of financial activities.

II. Agreement Focus Area

The FHWA and MoDOT shall carry out the terms indicated in this Agreement resulting in improved communication and streamlined financial decision making for Federal projects and programs.

III. Ground Rules

The following ground rules apply to the development and execution of each element of this agreement. We agree to concentrate efforts in improving our joint work by following these ground rules.

• We will implement activities covered by the agreement in a mutually supportive manner between MoDOT and FHWA.
• We will strive to ensure adherence to required planning processes and product time frames.
• We will respect each other by valuing the opinions of others and maintaining an open mind to suggestions.
• We will communicate with each other directly by telephone, mail, and email and more importantly, in face-to-face discussions.
• We will make decisions following a thorough discussion of the issue using appropriate communication methods. Timely decisions should be made following discussion.
• We will meet quarterly to address issues related to financial management and oversight.
• We will actively participate in scheduled meetings and add value to the discussion and refrain from personal agenda.
• We will promote good financial practices and make current best practices our method of conducting business.
• We will make decisions by evaluation of data consistent with applicable laws.
• We will recognize the timeliness and quality of our cooperative effort to deliver finance document reviews and approvals as reliable and measurable performance "output" indicators.
• We will revisit and revise this agreement as deemed necessary. At a minimum the agreement will be revised annually.
• We will strive to meet all deadlines and provide timely feedback to stakeholders.
• We will ensure internal controls exist within MoDOT and FHWA to properly manage federal funds.
• We will work together to ensure policies are clear and concise.
• We will collaborate to achieve mutual objectives, goals and initiatives.

IV. Roles and Responsibilities

Funds Management

• MoDOT and FHWA will manage active and inactive projects and report project status by established deadlines.
• MoDOT and FHWA will ensure full utilization of available funds.
• MoDOT and FHWA will ensure no lapsing of funds.
• MoDOT will report to FHWA annually the list of PE & ROW payback projects including any requests for extension.

Obligate Funds

• MoDOT will obligate funds in accordance with state and federal laws and regulations while implementing MoDOT's Tangible Results priorities and goals.
• All Federal-aid Agreements received by FHWA from MoDOT will be fully funded, and have the appropriate program approvals (e.g., PSE, ROW, force account, NEPA).
• Projects authorized but not awarded within 6 months will be deobligated.
• FHWA will approve project agreements within 14 days or provide an explanation of why the obligation was not approved.
• MoDOT will respond to project agreement inquiries within 14 days. Returned agreements will be unsigned by MoDOT if a resolution can not be completed within 24 hours.

Innovative Finance

• FHWA will advise MoDOT of new innovative financing tools to advance and complete transportation projects. MoDOT will consider new and innovative financial solutions offered by FHWA.
• FHWA and MoDOT will work together to continuously search for possible sources to identify new highway financing tools.

Oversight

• FHWA will provide oversight as it relates to Financial Integrity Review and Evaluation (FIRE) Program through risk assessments and related process reviews, spot checks or other practiced methods.
• MoDOT will be responsible for administering the federal aid program for the state and will use a risk based approach to implementing adequate controls to ensure compliance with federal laws and regulations.
• FHWA will provide MoDOT with reports to verify staff's access to FMIS.

V. Conflict Resolution

Historically, FHWA and MoDOT have benefited from an excellent working relationship. This Agreement intends to build upon this history by establishing a framework to further promote the existing partnership. This Agreement establishes the following procedures to resolve conflict, streamline processes and build a team spirit to achieve maximum success.

• We will confer on a regular basis. If there is a major programmatic issue the party bringing the concern to the table shall communicate the concern by e-mail or letter
• We agree each agency will maintain and up-to-date "lead contact" list of the individuals at each agency responsible for overseeing various areas of the finance and audit activities
• We agree, to the maximum extent possible, that issues involving the two agencies shall be resolved at the staff level.
  • When issues arise that cannot be resolved within one week at the staff level, we agree resolution of the issue will be sought at the staff manager's level.
  • When resolution of the issue cannot be realized at this management level, we agree the issue will be elevated to the MoDOT Resource Management or Audits and Investigations Unit Directors or Controller/FHWA Financial Manager level. Issues unresolved within one week at the second level will be elevated to the MoDOT Chief Financial Officer and the FHWA Assistant Division Administrator.
  • If issues are still unresolved, they will be elevated to the MoDOT Director and FHWA Division Administrator.

VI. Performance Evaluation

We will measure our paterning progress and success by the following performance indicators:

Funds Management

• Obligation of all available federal aid funds by the program deadline.
  • Percent of Federal-aid obligated in relation to FHWA annual obligation limitation. (quarterly)
  • Percent of local program funds obligated (quarterly)
  • MoDOT's desired trend is to reduce the percentage of inactive projects to 4% or less of the state's apportionment.
  • MoDOT will submit an inactive project detail report quarterly.

Obligate Funds

• FMIS transactions will be processed timely and accurately.
  • FHWA approves or returns 80 %of FMIS actions within 5 days.
  • FHWA approves or returns 90% of FMIS actions within 10 days.
  • Percent of MoDOT submitted FMIS actions approved with first submittal (separate State and LPA).
  • MoDOT returns 80% of corrected FMIS actions within 5 days.o MoDOT returns 90% of corrected FMIS actions within 10 days.
  • MoDOT will submit 95% of all letting projects 14 days prior to advertisement (separate State and LPA).
  • Percent of MoDOT LPA obligation requests worked within 5 business days by MoDOT.

Innovative Finance

• Utilization of innovative financing on transportation projects.
• Age of Advance Construction

VI. Communication with Management

We will keep senior management informed of our activities and how our partnering is working quarterly through verbal conversations. If issues have not been resolved and require action of senior management, a written communication regarding the issue will be shared with senior management and members of the FHWA and MoDOT Finance Teams and MoDOT AI. This communication will include:

• Issues that require resolution
• Successes, challenges and new projects.
• Our efforts to enhance communications and better working relationships between Finance and other focus area teams.
• Progress reports on activities and accomplishments.