FHWA/MoDOT Partnering Agreements

PARTNERSHIP AGREEMENT BETWEEN
FHWA AND MODOT FINANCE TEAMS and MODOT AUDITS AND INVESTIGATION UNIT

PURPOSE OF THIS AGREEMENT

The purpose of this Agreement is to set forth the general terms and conditions for collaboration in project close-out processes between the FHWA and MoDOT 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

Controller's (CT) and Resource Management (RM) Divisions and Audits and Investigation Unit (AI) staff and the staff of the FHWA Missouri Division Office responsible for the management/oversight of financial activities.

AGREEMENT FOCUS AREAS

The FHWA and MoDOT shall carry out the terms indicated in this Agreement resulting in improved communication and streamlined project closeout processes for projects.

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 divisions and FHWA.
• We will strive to ensure adherence to required 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 conversations.
• 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 as needed to address issues related to federal closeout processes.
• 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 comply with federal requirements and closeout projects.
• We will revisit and revise this agreement as deemed necessary. At a minimum the agreement will be revisited annually.
• We will strive to meet all deadlines and provide timely feedback to stakeholders.
• We will collaborate to achieve mutual objectives, goals and initiatives.
• 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.

ROLES AND RESPONSIBILITIES

Project Close Out and Agreed Upon Procedures

1. MoDOT and FHWA will manage project closeout.
2. MoDOT and FHWA will ensure full utilization of available funds.
3. MoDOT and FHW A will take action to manage inactive projects.

Finalize Projects

Applicable to Projects available for close out effective November 1, 2009

1. MoDOT and FHWA will close projects on a timely basis. The timelines below are contingent on documented unique factors impacting the project closeout process.
   • CT will maintain an electronic listing all project files available for audit. Availability wil! be determined based on final invoice received from vendor.
   • AI has unrestricted access for audit to any and all project files, closed or otherwise, as authorized in the Audit Charter of the Missouri Highways and Transportation Commission's (MHTC) Audit Committee.
   • CT will provide AI access to CT's electronic list of projects available for audit each calendar quarter. This process will be effective November 1, 2009, with the list including projects available for audit effective October 1, 2009.
   • AI will select projects from the list for audit. The selection will be made using any of the following methods:
     • Block sampling
     • Ranaom selection
     • Systematic selection
     • Special requests
     • Other methods to be defined
   • The sample size selected for potential agreed upon procedures will be 10-15% of all federal projects and 10-15% of all state funded projects.
   • AI will communicate to CT as soon as possible, but no later than ten (10) business days after the end of the quarter those projects AI has selected for review.
   • CT will maintain the selected projects until AI requests the project file for audit.
   • CT will provide AI quarterly a list of all projects selected and still held for AI. If the project files maintained by CT for AI reaches 150, AI will select a smaller sample size to control the backlog.
   • As a general guidance, AI will limit the number of files in Al's office under audit and review to a minimum, not to exceed 150, excluding those under protest. The minimum number of files in AI will fluctuate due to variables in block audits, complexity, workload, and cooperation of auditee.
   • CT will close all projects not selected for audit.
   • CT will close any project selected and not requested by AI three years from the date of the final invoice.
2. For this initial agreement, MoDOT and FHWA agree railroads are not included in the sample selection. This area will be reevaluated as appropriate.
3. MoDOT and FHWA agree CT will randomly review documentation that supports charges for reimbursement prior to closing projects not selected by AI.
4. MoDOT and FHWA Finance Teams Partnership Agreement addresses time lines for final voucher approval processes.
5. MoDOT and FHWA agree closed projects may be reopened and subjected to audit based on written justification and approval by the Director of AI and coordinated with RM, CT, and FHWA Transportation Financial Manager. It is agreed that requests to have closed files reopened will be held to a minimum as to not create additional workload on CT staff.

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.

1. 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.
2. We agree each agency will maintain an up-to-date "lead contact" list of the individuals at each agency responsible for overseeing various areas of the finance and audit activities.
3. 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's manager 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 I FHWA Financial Manager level. Issues unresolved within one week at the second level will be elevated to the MoDOT Chief Financial Officer and FHWA Assistant Division Administrator.

If issues are still unresolved, they will be elevated to MoDOT Director and FHWA Division Administrator.

PERFORMANCE EVALUATION

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

1. Old projects final vouchers will be processed and approved by FHWA by December 31, 2010.
2. New projects final vouchers will be processed and approved by FHWA by the end of the quarter following the quarter they are available for audit selection by AI and are not selected by AI. An explanation will be provided if this time line is not met.
3. FHWA will provide federal oversight, in collaboration with MoDOT, as it relates to the best practices in close out processes.

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:

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

Bill Rogers
Director of Audits and Investigations Missouri Department Of Transportation
Date: 2-2-2010

Brenda Morris
Resource Management Director
Missouri Department Of Transportation
Date: 2-2-2010

Debbie Rickard
Controller
Missouri Department Of Transportation
Date: 2-2-2010

Kirk Boyer
Transportation Financial Manager
Federal Highway Administration - Missouri Division
Date: 1-26-2010