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CONSTRUCTION GRANTS AUDITS
FREQUENTLY ASKED AUDIT QUESTIONS
Updated 10/02
Q1. Do you have a sample format that we can use to set up our procedures and record keeping?
Q2. Do you have a list of qualified auditors statewide?
Q4. What level of detail is required to substantiate the contractor’s billings?
Q6. Our county has gone to ‘imaging’ of the documents. Is this an acceptable alternative to originals?
Q7. How should we track and report contingency funds for audit purposes?
Q1. Do you have a sample format that we can use to set up our procedures and record keeping?
A1. Since each county has its own unique record keeping system, there is not a statewide template.
However, refer to Appendix H, Exhibit K, of the Board of Corrections, Grant Contract Administration and Audit Guide, for detailed information on key protocols needed for proper procedures and record keeping.
Q2. Do you have a list of qualified auditors statewide?
A2. You may wish to contact other counties in your area that have had successful audits for a recommendation.
Q3. Is the 20% retention held until completion of the federal single audit? What is the relationship between the two?
A3. The 20% retention is released following Board of Corrections(BOC) acceptance of the final project audit and the county providing the BOC with a Certification Letter that the project will be included in the next federal single audit.
Q4 . What level of detail is required to substantiate the contractor’s billings?
A4. There must be enough detail to substantiate what is paid. This would include, for example, the number and type of windows, etc. If the contractor is being paid based on the percentage of project completion, the County needs documentation that this percentage was completed. This may include written agreements that define the percentage, written notes or log entries from a site visit at the time of the billing, photographs and other such verification of the project.
Q5. What if there is additional construction taking place after the grant funds have been expended? Can we file our final invoice, have the audit performed and receive our 20% retention even though there is still construction in progress that is not part of the grant?
A5. The project circumstances will need to be reviewed by assigned BOC staff on a case-by-case basis. The grant contract requires that the grant construction project receive fire marshal, building inspector and BOC living area space evaluation approval, and be fully staffed and operational within 90 days of construction completion. The final audit must be completed and submitted to the BOC within 90 days to release the 20% retention.
Q6. Our county has gone to ‘imaging’ of the documents. Is this an acceptable alternative to originals?
A6. Yes.
Q7. How should we track and report contingency funds for audit purposes?
A7. Any contingency funds must first be moved to an allowable Construction Specification Institute Division line item via a budget modification request. If the budget modification is approved by the BOC, the County can expend funds and claim reimbursement against the approved line item. Funds cannot be directly claimed against the contingency category. The construction contractor also needs to invoice the County against the appropriate CSI Division line item (e.g., mechanical, electrical, concrete, etc.) in order to establish a clear audit trail.
Q8. How do we handle the retention we withhold from the construction contractor’s billings? Since these are costs already incurred, can we claim state reimbursement for this encumbrance before we pay the contractor?
A8. All invoices for grant reimbursement must be for actual expenditures made by the County for budget items identified in the contract. Therefore, the retention cannot be reimbursed until the County has paid those funds to the contractor. This reimbursement is generally claimed in the final invoice to the state.