BOARD OF COUNTY COMMISSIONERS
WILD ACRES ROAD PROJECT #921904
REPORT NO. 2000-04
DATED: APRIL 27, 2000
The Board of County Commissioners
The Clerk of the Circuit Court
Pinellas County, Florida
The Internal Audit Division has conducted a review of the Wild Acres Road Project.
The purpose of this audit was to: 1) assess the effectiveness of the controls utilized to monitor Contractor performance, 2) appraise the compliance of management with their policies and procedures, and 3) determine whether payments associated with the Wild Acres Road project were properly authorized and appropriate.
We reviewed Florida Statutes, County Code, and contract documents related to the project activities. We flowcharted the Contractor payment and change order process. We tested Contractor payments that occurred between March 1, 1999 and October 31, 1999 to ascertain if they were properly supported and approved. We compared the control procedures performed related to material deliveries, progress payments, certain contract requirements and changes in work with management's prescribed policies and procedures. We performed such other audit procedures as we considered necessary.
The Department of Public Works (DPW) develops and implements the expansion and improvement of the County's infrastructure in accordance with the six-year Capital Improvement Program. The first year of the program is the basis for actual appropriations authorized by the Board of County Commissioners (Board) for capital projects when adopting the annual budget.
The Wild Acres Road project contract No. 921904 was from Ulmerton Road, north to 138th Place North. The Wild Acres Road project is approximately 1,250 feet long. The contract was awarded to Keystone Excavators, Inc. The original contract amount was $638,195 with a completion date of August 11, 1999.
The results of our review are shown below. They begin with an overall evaluation, followed by a detailed discussion of the findings and recommendations with management's responses.
The Internal Audit Division has conducted a review of the Wild Acres Road project. We have concluded that there was substantial compliance with the contract. We verified that the financial accounting for the project was accurate. We have concluded that the policies and procedures used to guide the activities provided adequate control. Our review disclosed conditions which, if addressed, would result in improved operations.
FINDINGS, RECOMMENDATIONS, AND RESPONSES
FINDING 1 - The Daily Diary does not consistently record appropriate quantities.
Public Work's policy and procedure manual sets out several requirements for the Daily Diary. Its purpose is to record the work performed each day, specifically indexed by item number. "Job progress must be reported in terms of quantity, distances, stations, and weight, as they are appropriate and applicable." "Reporting must account for all bid item quantities including when, where and what was constructed by exact limits so as to establish an accurate audit trail."
One of the bid items we selected for testing was item number 260-1000 bedding material, crushed concrete 8" thick, measured by the square yard. The delivery receipts and the material deliveries recorded in the Daily Diary were listed in tons. The material deliveries were listed by date and include delivery receipt number ranges and quantities in tons. The delivery receipts were not tied into the progress of the work. The Daily Diary only identified that bedding material was spread from one station to another station. There was no statement of how many square yards of bedding material was constructed between the stations. The work performed each day was not reported in the appropriate bid item quantity of square yards.
The Monthly Progress Report and the Request For Payment quantities were appropriately listed in square yards. We could not, however, reconcile these reports to the Daily Diary since the work performed related to bedding material was not recorded in the appropriate quantity. The recorded information didn't establish an accurate audit trail from the delivery receipts to the payment request.
FINDING 2 - A Change Order was not submitted to the Board for approval in a timely manner.
The original contract completion date for the Wild Acres Road project was August 11, 1999. The original contract amount was $638,195. There is correspondence describing cost and time impacts related to City of Largo and Florida Power utilities that began around the end of June, 1999. A letter dated October 15, 1999 from Keystone Excavators to DPW indicated that the agreed upon changes in work, as of that date, totaled $72,371.63 and the extension in total project time was 96 days. This time extension would move the completion date to November 16, 1999.
Changes that represent an increase of over 10% or 30 days must go through "Contract Review." The changes being proposed require that the "Change Order" be submitted for approval to the same reviewing authorities as the original bid agreement, prior to the "Change Order" being submitted for approval to the Board.
A letter from Public Works to Keystone Excavators, Inc. stated that the project was substantially complete as of November 16, 1999. As of February 11, 2000 a "Change Order" has not been submitted to the Board.
Audit supervised by:
Billye M. Wilcox, Sr., CPA
Chief Deputy Director
Internal Auditor Division
Karleen F. De Blaker
Clerk of the Circuit Court
Ex Officio County Auditor
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