Attachment_J-3_Draft_SOP.pdf

Request for Proposal (RFP), DTFT60-13-R-00001 Triennial Review

Attachment J-3

Triennial Review Contractor Standard Operating Procedures 1 FY2013

DRAFT

Standard Operating Procedures (SOP) For FTA Triennial Review Contractors

I. OVERVIEW

The Triennial Review involves the following major steps, which are separately addressed in this Standard Operating Procedures (SOP) document:

Contractor is tasked with performing triennial reviews for a defined list of grantees on an annual basis

FTA and the Contractor participates in kickoff meetings in FTA HQs and Regional Offices

Contractor updates Triennial Review Workbook reflecting current FTA review guidance to all Contractors and grantees [This task will be assigned to one Contractor each year (e.g. is not a task all Contractors will perform each year.)]

Contractor prepares pre-review assessment information requests

FTA transmits pre-review assessment information requests to the grantees

Grantees provide requested information

Contactor performs pre-review assessment

Contractor develops recommendations for the level of review indicated for each grantee

Contractor schedules and conducts scoping meetings with FTA

Contractor and grantee develop site visit schedule

FTA determines the level of review needed for each grantee

Contractor prepares triennial review agenda packages for each grantee

FTA transmits triennial review agenda packages to the grantees

Grantees provide requested information to Contractor

Contractor finalizes site visit schedules and transmits to grantee and FTA Regional Office

Contractor holds a site visit entrance conference

Contractor conducts the on-site review

Contractor holds exit conference and provides a summary of findings to the grantee

Contractor prepares draft report

Contractor prepares final report and transmits to the FTA Regional Office for review

FTA transmits final report to grantee

Triennial Review Contractor Standard Operating Procedures 2 FY2013

Contractor provides FTA with a copy of the Contractor’s work papers

Contractor updates the FTA oversight tracking software system with a copy of the final report and findings

Contractor provides technical support to help close findings for 90-days from exit conference

FTA closes out the findings

The Contractor is responsible for recording the progress of each triennial review in FTA’s oversight tracking software system (currently OTRAK) in addition to providing status updates in respective monthly progress reports submitted to FTA.

II. PREPARING FOR THE TRIENNIAL REVIEW

Kickoff Meetings

Contractors participate annually in a program-wide kickoff meeting in FTA HQs and separate kickoff meetings with individual FTA Regional Offices assigned for triennial reviews.

The Contractor is responsible for attending a program level kickoff meeting held by the FTA Contracting Officer (CO) and the Contracting Officer’s Representative (COR).

The Contractor’s project manager is responsible for scheduling and making all necessary arrangements for conducting a kick-off meeting for each FTA Regional Office with jurisdiction over the grantees assigned to the Contractor. The Contractor shall coordinate with the COR and regional staff to schedule these kickoff meetings for a date/time that is acceptable to all parties.

The Contractor’s project manager is responsible for preparing a draft work plan of all triennial review activities assigned in that region for review and discussion at the kickoff meeting.

Specifically, the work plan shall include a preliminary schedule of key milestone activities, such as the pre-review assessment, the scoping meeting and the site visit dates for each grantee in that region. The Contractor shall identify in the work plan any specialized reviews or audits currently underway or planned for their assigned grantees and propose triennial review schedules which do not conflict with those other reviews or audits. The draft work plan shall be submitted to the Regional Office and the COR at least 10 calendar days before the kickoff meeting is held.

The draft work plan shall be accompanied by an agenda for the kickoff meeting to include administrative items such as regional points of contact and protocols for the upcoming triennial review season.

The Contractor’s project manager is responsible for preparing, distributing and finalizing meeting minutes for each kickoff meeting and providing them electronically to both the Regional Office and the COR within 10 calendar days following each kickoff meeting.

Triennial Review Work Plans

Within 10 calendar days following final regional kickoff meeting, the Contractor shall provide the COR with a draft final work plan. The draft final work plan shall be summarized at the national level with the ability to review and manage activities at the regional and individual grantee level. Once

Triennial Review Contractor Standard Operating Procedures 3 FY2013 approved by the COR, the final work plan will form the basis for monitoring the progress of the Contractor’s activities each month. Within 10 calendar days following approval of the final work plan, the Contractor shall enter process stage information into OTRAK for each grantee assigned for review.

The Contractor shall coordinate directly with the grantee and FTA at all stages of the review for all scheduling matters and shall confirm grantees’ receipt of all time-sensitive review documents, such as the pre-review assessment package, the review package, the draft report, etc. For all assigned reviews, the Contractor shall be responsible for scheduling and confirming the agreed upon site visit date(s) in writing to the grantee and the FTA Regional Office, with a copy to the COR.

Triennial Review Contractors Guide

The Contractor, when tasked by the COR in writing, shall be responsible for updating the previous year’s Triennial Review Workbook (Workbook) to reflect:

Changes in FTA policy;

Changes in specific areas to be reviewed, questions to be asked and/or documents to be examined;

Changes in triennial review processes; and

Changes in regulatory requirements against which the grantees will be reviewed.

The Contractor shall conduct the necessary research and meet with FTA staff in Washington, D.C. as necessary, to update the Workbook.

Within one week of assignment of the Workbook, the Contractor shall provide a draft workplan with proposed schedule for completion to the COR. The Contractor must get the COR’s review and acceptance of this schedule. This “A draft” of the updated Workbook shall be prepared and submitted by the Contractor to the COR electronically in MS Word format. The final Workbook shall be prepared and provided to the COR electronically in MS Word format within two weeks of receiving FTA review comments. Additionally, the Contractor shall transmit five bound hard copies of the final Workbook to the COR and one bound hard copy of the final Workbook to each FTA Regional Office.

III. THE PRE-REVIEW ASSESSMENTS & SCOPING MEETINGS

Pre-Review Assessment Information Requests

Within 21 calendar days of having the final work plan approved by the COR, the Contractor shall submit to the Regional Oversight Director and Regional Triennial Review Program Manager a pre-review assessment information request for each grantee assigned to that Contractor. Each information request shall consist of a cover letter properly addressed to the agency’s chief executive officer together with a list of the pre-review assessment information and documents that the grantee is to provide based on that grantee’s tier level, as outlined in the Workbook and a preliminary triennial review package for use by the grantee in planning for the triennial review. The

Triennial Review Contractor Standard Operating Procedures 4 FY2013 cover letter shall provide the grantee with an overview of the triennial review’s overall process and tentative dates for the planned site visit.

All pre-review assessment information requests will be transmitted to the grantees directly by FTA Regional Offices and the grantees will have up to 4 weeks to provide the information and documents requested therein. The grantees will be instructed to submit this information directly to the Contractor.

The Contractor shall contact each grantee by telephone one week after the pre-review assessment information requests have been sent by FTA. This telephone contact is intended confirm that the pre-review assessment information request arrived and to ask the grantee if there are any questions about the items requested. The reviewers will remind the grantee to send the requested materials and type-written answers to the questions directly to the Contractor by the due date. The Contractor shall also discuss the triennial review’s remaining steps and establish the site visit date(s).

Background Research

During the time when grantees are gathering and preparing their responses to the pre-review assessment information requests, the Contractor shall conduct background research on the grantees. This background research includes, but is not necessarily limited to reviewing:

Most recent and any open A-133 Annual Audit reports;

Grantee information contained in OTRAK and all attached documents (e.g. review findings & reports from previous triennial reviews, financial management reviews, civil rights reviews, procurement systems reviews , grantee oversight assessments performed by the regions, etc.);

Grantee information contained in TEAM and all attached documents (e.g. grant milestone progress reports, Annual Certifications and Assurances) to gain an understanding of the type of projects being undertaken by the grantee;

Audit reports, if available, including any pertinent General Accounting Office (GAO) or Office of Inspector General (OIG) audits;

Civil Rights information under grantee profile in TEAM and any files uploaded in TEAM related any civil rights issues noted Regional Office Civil Rights files;

Planning documents including results of the most recent Planning Certification Review (on file at FTA Regional Offices);

National Transit Database (http://www.ntdprogram.gov/ntdprogram);

Any complaints on file at FTA Regional Offices regarding civil rights, Americans with Disabilities Act (ADA) compliance, charter bus service, school bus service;

Buy America waiver requests submitted by the grantee;

Any other relevant information provided by FTA; and

Grantee website.

http://www.ntdprogram.gov/ntdprogram

Triennial Review Contractor Standard Operating Procedures 5 FY2013

Conducting the Pre-Review Assessment

The Contractor shall immediately notify the Regional Office Oversight Director and Regional Triennial Review Program Manager if a grantee has not responded within the allotted time and/or if the information provided by the grantee falls short of what was requested. The Contractor shall follow up with phone calls and emails to the grantee’s triennial review point of contact as necessary to obtain the requested pre-review assessment information.

The Contractor shall review the material provided by the grantee together with the background information already obtained by the Contractor. The focus of the pre- review assessment is primarily in the high-risk areas of (1) procurement (including Buy America and the Disadvantaged Business Enterprise (DBE) program, (2) financial management, (3) financial capacity, (4) the Americans with Disabilities Act (ADA), (5) maintenance (vehicle and facilities), (6) technical capacity and (7) Title VI. The Contractor is responsible for identifying grantees who should receive a more in-depth review in one or more of these areas based on the presence of “risk triggers”. For each high-risk area identified above, these risk triggers include, but are not necessarily limited to the following:

Procurement, including Buy America and the Disadvantaged Business Enterprise (DBE) Program

No evidence of established, written procurement policies and procedures which conform with the latest FTA Third Party Contracting Guidance Circular 4220

Upcoming procurements which are unusual in size, type or complexity for the grantee

Substantive bid protests

Evidence of poor organizational structure of procurement functions

Disproportionate amount of sole source or other non-competitive contract awards

New grantee

Procurement functions being handled by another agency, city, county or state

Evidence that senior procurement staff and/or agency leadership are not familiar with FTA Circular 4220

Recent organizational changes and/or staff turnover affecting procurement function

Procurement functions being handled by another agency, city, county or state

Upcoming or recent procurement types susceptible to Buy America compliance issues

Insufficient documentation of DBE program goals and monitoring efforts

Open procurement-related findings from a previous review or audit

Any indications of waste, fraud or abuse

Evidence of poor contract management procedures

Resource issues relating to DBE implementation

Financial Management

Staff turnover in key financial management positions

Staff shortages in one or more key financial management areas

Evidence of poor internal controls

New grantee

History of poor financial management

Triennial Review Contractor Standard Operating Procedures 6 FY2013

Delay in grantee having its annual audit completed or issued

Open financial management findings from a previous review or audit

Accounting periods not closed for extended periods of time

Inability to provide basic financial data and reports

Any indications of waste, fraud or abuse

Financial Capacity

Problems with local share availability or source

Significant service cuts recently enacted or proposed

Significant downsizing of staff and/or reduction in benefits

New mode of transit service recently implemented or planned

Evidence of deteriorating vehicle and facility asset conditions

Evidence that grant funds are being inappropriately diverted to other uses

The Americans with Disabilities Act (ADA)

New grantee

Grantee is implementing a new mode of transit service

Change in service provider for contracted service (not only ADA specific services)

Major change in service delivery (e.g., implementation of conditional paratransit eligibility)

Construction of new facilities or stations and/or major alterations to existing ones

Major procurement of new vehicles or other rolling stock

Potential and substantiated deficiencies identified by TCR through complaint investigations, compliance reviews, and other sources

Maintenance

Grantee is unable to provide a maintenance plan or an asset management plan for facilities and equipment

Maintenance plan exists but is insufficient or is outdated

For rail operators, there is no fleet management plan, it is outdated or is inadequate

No indication that the grantee’s senior leadership receives routine maintenance trend reports and acts on problems

No evidence of a recordkeeping system which permanently records and updates the maintenance history of facilities and equipment

Average fleet age is rising significantly, with no plan for replacement of vehicles

Evidence of inadequate oversight of outsourced maintenance functions

Evidence of inadequate oversight of maintenance functions by sub recipients

Technical Capacity

Changes in size or experience of grantee staff

Funding for a project type which is new or unusual for the grantee

Outstanding audit or review findings that indicate systemic technical capacity concerns

Unexplained or poorly explained implementation delays

Triennial Review Contractor Standard Operating Procedures 7 FY2013

Large number of open and/or dormant grants o These may indicate projects are delayed

Large number of revised estimated completion dates in TEAM for grantee projects with no or limited explanation provided in milestone progress reports

No evidence of any sort of staff competency hiring process/training plan/retention program

Individual staff managing multiple key functions

Evidence of inadequate information technology systems

Title VI

New grantee

No evidence of an acceptable Title VI plan from FTA

Staff changes or shortages in key Title VI positions

Recent major service and/or fare changes

A service and fare equity analysis finding of a disparate impact

A service and fare equity analysis that is provided solely in a narrative format

Potential and substantiated deficiencies identified by TCR through complaint investigations, compliance reviews, and other sources

Preparing for and Conducting the Scoping Meeting

Based on the Contractor’s background research and review of the grantee response(s) to the pre-review assessment information request, the Contractor shall prepare a “Scoping Worksheet and Recommendations” form for each grantee and submit it to the Regional Office Oversight Director and Regional Triennial Review Program Manager COR and the Regional Office no less than 3 calendar days before the scoping meeting. This form will be used as the basis for discussing the Contractor’s pre-review assessment of each grantee and documenting the outcome of the scoping meeting with the Regional Office. The Contractor shall be prepared to discuss each high-risk area examined in terms of documents/information provided by the grantee, background information on the grantee obtained elsewhere, the existence or absence of specific “risk triggers” and recommendations, if any, for conducting an enhanced level of review in one or more of the high-risk areas.

The scoping phase of the triennial review will conclude with FTA making a determination as to whether or not the Contractor will conduct an enhanced level of review in one or more of the high risk areas based on the Contractor’s assessment and recommendation(s) and FTA’s own knowledge of the grantee, including the annual oversight assessment process conducted each year by FTA regional staff. The Contractor shall document FTA’s decision(s) on the “Scoping Worksheet and Recommendations” form, copies of which will be provided to the Regional Office and uploaded to OTRAK and maintained in the Contractor’s files.

The Contractor shall only proceed with actually conducting an enhanced level of review in one or more of the high-risk areas when directed to do so in writing by the COR.

Triennial Review Contractor Standard Operating Procedures 8 FY2013

IV. THE TRIENNIAL REVIEW

The Review Package

Following the scoping phase, the Contractor shall prepare a triennial review package for each grantee and provide these to the FTA Regional Office for transmittal to the grantees. These packages include:

A cover letter addressed to the grantee’s Chief Executive Officer; copying the grantee’s designated triennial review point of contact, the Regional Administrator and Regional Office Oversight Director COR and the Contractor; drafted for the Regional Administrator’s signature; providing detailed instructions to the grantee and information about the planned site visit;

The grantee profile form for the grantee to complete as part of the review package/worksheets.

The list of documents required for the review; identifying which ones are to be submitted to the Contractor in advance of the site visit and which ones are to be made available for review during the site visit;

The list of questions requiring a response from the grantee;

The draft site visit agenda addressing the order in which the review areas will be covered and the time of day when individual topics will be addressed.

The Contractor is responsible for ensuring each triennial review package is transmitted to the grantee no less than 60 calendar days before the scheduled site visit. The Contractor shall contact the grantee by telephone at least 5 calendar days after the package is transmitted by FTA and no less than 35 calendar days before the site visit to ensure the package was received, confirm the site visit dates and schedule, make sure the grantee understands what is expected in advance of the site visit and during the site visit, review when the advance materials are due and answer any questions.

The Contractor is responsible for reviewing all materials submitted by the grantee in advance of the site visit and documenting this portion of the review.

The Contractor shall immediately notify the Regional Office if the grantee fails to provide the requested information when due and/or if there are substantive items missing in the grantee’s submittal.

The Site Visit

It is important that the site visit be well planned and executed. Organize all files, notes, and other papers neatly. Conduct yourself with professionalism and courtesy at all times. Create a positive, not adversarial atmosphere.

Conducting a site visit consists of several activities:

1. Scheduling of the site visit

Triennial Review Contractor Standard Operating Procedures 9 FY2013 o If the date has not been finalized, during the scoping meeting with the Regional Office, the Contractor contacts the grantee to identify a convenient date for the site visit and confirm with Regional Office. Typically, the site visit takes about one and one-half to two calendar days for a small to mid-sized grantee, and several calendar days for a larger, multi-modal grantee. Schedule the site visit at a time when the appropriate grantee officials will be available to meet with the review team and discuss the issues that are identified.

2. Send the review package.

o E-mail the initial review package to the grantee at least 60 calendar days before the site visit.

o After completing this step, decide if any items require follow-up with the grantee before the entrance conference. This may be necessary if the grantee did not submit all of the requested information and/or did not provide complete answers to the questions.

o E-mail the review package with the final schedule and follow-up items to the grantee at least seven calendar days before the site visit date.

3. OTrak – enter process stages o Using the ‘Site Visit Planned’ and ‘Site Visit Start/Entrance Conference’ process stages in OTRAK, enter the planned date for the entrance conference once the date has been confirmed with the Regional Office and the grantee. Update these dates in OTRAK if changes occur.

4. Entrance conference o The site visit begins with an entrance conference with grantee management and staff; the FTA Regional Office (on-site or by telephone) and the COR (on-site or by telephone for a select sampling of reviews).

o The Contractor is responsible for conducting this entrance conference with the grantee to introduce the grantee to their review team members, review the site visit agenda, provide the list of source documents needed for review, staff members to be interviewed, projects, service corridors, rolling stock and other federally funded assets to be inspected, and address any other logistical and administrative issues related to the site visit.

o The entrance conference consists of a reiteration of the purpose of the review, a discussion of the findings of the desk review, and a summary of the steps in the preparation of the draft and final reports. Record the names and titles of all participants at the entrance conference. While senior staff is assembled at the entrance conference, review the schedule for the site visit and confirm the expected time for the exit conference. Ask the grantee if there are any issues they would like to discuss or bring to FTA’s attention.

Triennial Review Contractor Standard Operating Procedures 10 FY2013 o During entrance conference, Contractor shall address any last minute requests from grantee to modify the final schedule in order to accommodate grantee’s staff availability. It is understood that FTA requests to modify the site visit agenda have implications to grantee’s staff and Contractor’s schedule and shall be avoided if possible.

5. Physically inspect selected grantee facilities o Verify that FTA funded facilities and equipment are in transit use, observe the condition of the facility and equipment, review preventive maintenance records for a sample of FTA funded revenue vehicles and facilities, verify that the grantee has equipment control procedures, review procurement files and other documentation to confirm that the grantee has effective and comprehensive oversight procedures.

6. Select samples and review source documents o Follow the protocols detailed in Attachment A: Record Selection Procedures o Indicate to the grantee which ECHO draws, procurements, equipment and facilities have been selected for examination during the site visit. If one of the enhanced review modules is selected, notify the grantee that a more detailed review will be held in the selected area.

7. Interview selected grantee staff o Following the entrance conference, discuss the outstanding questions in each review area. For reviews conducted by a team, have only one team member ask questions in a particular area. At the end of the questioning, the lead reviewer may invite further questions from other members of the team, but assign one person with primary responsibility for each area.

o When the review of an area is complete, state that it is time to move on to the next area. It is important to stay focused on the area under review. Do not ask questions from another area. This practice can confuse the grantee and makes the reviewers appear disorganized. If necessary, note the question and raise it at a later time. At the end of the review, but prior to the exit conference, ask the grantee to get answers to any remaining questions not yet resolved.

o Grantees may close deficiencies during the site visit. Deficiencies closed before an agreed upon deadline before the exit conference do not appear in the list of findings. Document the deficiency and corrective action in the package.

8. Secure input from Regional Office o Confer separately with regional staff about the deficiencies in each area. If no regional staff members are present at the site visit, e-mail the list of findings to the region, after performing internal QA/QC, for approval before the exit conference.

9. Prepare a list of preliminary findings

Triennial Review Contractor Standard Operating Procedures 11 FY2013 o A draft report will not be issued at the exit conference. The Contractor will develop and issue a list of preliminary findings. For consistency among all reviews, use the language for corrective actions that appears in this guide.

10. Hold exit conference o The site visit concludes with an exit conference. The Regional Office staff will participate in the exit conference either in person or by telephone.

o Discuss each preliminary deficiency and the length of time the grantee feels they will need for implementing the corrective action(s). Discuss the timeframe for when the grantee can expect the draft report (within 14 calendar days from the exit conference) and issuance of the final report (30 calendar days from the issuance of the draft report.

o Ask the grantee to limit comments to corrections of misstatement of fact and a confirmation of or a request for an extension of the deadlines for the corrective actions.

11. Prepare the Draft Report and distribute to the Regional Office o Considering the timeframes requested by the grantees, any estimated timeframes provided by FTA, and the default of 90-days, the Contractor will assign deadlines for all corrective actions in the draft report. Use the actual date in the report. If the calculated date falls on a weekend or holiday, use the next available business day as the due date.

o The Contractor will provide a copy of the draft report to the Regional Office within seven calendar days of the exit conference. If the Regional Office has any comments to the draft report, the Regional Office will have five calendar days following receipt of the draft report to provide comments. If there are no comments, the Contractor will issue the draft report with the FTA cover letter. If there are comments the Regional Office will return the comments to the Contractor, the Contractor will update the draft report and issue the report to the grantee with the FTA cover letter within three (3) calendar days. The grantee will have seven (7) calendar days to review the draft report and provide comments to the Regional Office and the Contractor.

12. Distribute the draft report to program offices.

o As soon as possible after issuing the draft report, upload it to OTRAK and distribute it to the designated contact in FTA Headquarters when deficiencies exist in the following areas:

Financial

Procurement

Buy America

Triennial Review Contractor Standard Operating Procedures 12 FY2013

Lobbying

DBE

Title VI

ADA

Charter Bus

Safety and Security (all reports)

Drug and Alcohol Program

EEO

Headquarters subject matter contacts have five calendar days for review.

Refer to the attached list for the contact for each review area.

13. Prepare the final report o The Regional Office has seven calendar days to prepare comments for the Contractor.

o If the grantee submits documentation to close a deficiency; the Contractor shall review the documentation and recommend a course of action to the Regional Office.

o Deficiencies closed within the seven calendar days appear in the final report as closed (recorded in final report and OTRAK with date of submittal by grantee).

Discuss any requests for additional time for a corrective action with the Regional Office.

o The input for the final report will be transmitted to the Regional Office electronically within 30 calendar days of the site visit. Prepare and transmit the final report file and cover letter to the Regional Office in MS Word format.

o The Regional Administrator will transmit the final report to the grantee within 30 calendar days of the draft report.

o The Contractor will upload the final report with the transmittal letter to the grantee’s folder on the TEAM system.

14. OTrak – Enter findings o Within five calendar days of the issuance of the final report by the Regional Office, obtain an electronic copy of the final report that was issued (the Regional Office may have made changes), enter the findings from the report into OTRAK, upload the final report to OTRAK, and verify that process stages are accurate and complete.

15. Finalize the review package and files

Triennial Review Contractor Standard Operating Procedures 13 FY2013 o Once the final report is issued, finalize the review package and submit the file electronically into OTRAK. Prepare file folders with electronic or hard copies of supporting documents and mail the files to the Regional Office. Follow the file structure described in the following section. Submit the files no later than 30 calendar days following the submission of the final report. Upload the requested review package as well as the final report into OTRAK.

16. Close out the review o The Regional Office is responsible for monitoring the implementation of corrective actions and closing out deficiencies.

o When utilizing Contractor corrective action support, the Regional Office will provide any technical assistance to the grantee that is required after the 30 days after finding closure due date duration of Contractor corrective action support.

REVIEW PACKAGE, SOURCES OF DOCUMENTS, AND FILES

The triennial review package aids reviewers in the organization and completion of the work assignment and provides support for the findings made during the review. The review packages are completed by reviewers electronically. The review package should include the name of the reviewer, the date that the site visit was conducted, and the sources of the information used to develop findings and conclusions.

The package should include citations of documents and note that the documents can be found in the Regional Office and in the grantee’s files. A complete review package should substantiate the fact that sufficient, competent documentation was obtained through inspection, observation, inquiries, and testing to afford a reasonable conclusive basis regarding any finding, including a finding of “no deficiency.” Although the grantee will provide content for the review package prior to the site visit, it is the reviewer’s responsibility to vet the accuracy of this information so that it provides an accurate record of the triennial review for the specific grantee.

Organize supporting documents that are provided by the grantee in advance of the scoping meeting and site visit or made available on site into a folder (electronic format if possible) for each review area. The following table lists suggested contents of paper and/or electronic files by topic area. Properly label each file. The actual file contents will vary, depending on the size and complexity of the grantee. Use professional judgment in determining what documents to retain on file and what documents to cross-reference in the package as accessible in FTA’s or the grantee’s files.

QUALITY CONTROL

Quality control checks must be performed by the Contractor in every step of the triennial review process. This Contractors’ guide establishes common steps to be followed by every reviewer in conducting triennial reviews in all FTA regions. This guide also presents a common interpretation of FTA requirements and corrective actions to be implemented when a grantee is deficient. Reviewers should contact their respective project managers with questions and/or clarification; or when faced with an

Triennial Review Contractor Standard Operating Procedures 14 FY2013 unusual situation. The project manager may decide to seek additional guidance from the COR/program offices so that findings are consistent with FTA’s interpretation of the requirement.

FTA provides training and information to the triennial review Contractor teams. It is the responsibility of each Contractor to ensure that all team members are adequately trained in FTA requirements and the contents of this Contractors’ guide. An experienced member of the Contractor’s team, other than the one who is responsible for conducting the site visit, is expected to review the draft report. The final report is reviewed and edited by an experienced member of the Contractor’s team before it is forwarded to the regional staff.

CONTRACTORS’ GUIDE UPDATES

The Contractors’ guide is updated annually to coincide with the beginning of the triennial review cycle at the start of the Federal fiscal year. The information in the Contractors’ guide is kept up to date during the fiscal year by program advisories as needed. If changes to an area are extensive, the guidance for that area may be revised completely and shared with the recipients of the Contractors’ guide.

FRAUD DETECTION AND REPORTING

The Office of Inspector General (OIG) of the United States Department of Transportation works to promote effectiveness and head off, or stop waste, fraud and abuse in departmental programs. This is done through audits and investigations. OIG also consults with the Congress about programs in progress and proposed new laws and regulations.

If a reviewer detects or becomes aware of fraudulent activities involving FTA grant funds during a triennial review, he or she should contact the regional Triennial Review Coordinator as soon as possible.

Be prepared to provide available information. It will be the responsibility of the regional coordinator to pursue the matter further.

http://www.oig.dot.gov/

Triennial Review Contractor Standard Operating Procedures 15 FY2013

FTA Headquarters Draft Report Distribution List

Contact information will be provided to selected contractors in the Final SOP.

Triennial Review Contractor Standard Operating Procedures 16 FY2013

ATTACHMENT A

RECORDS SELECTION PROCEDURES

FTA would like to ensure a consistent approach in sampling records. Although a larger sample may be necessary due to particular circumstances at an individual grantee, the following selection procedures should be followed in the areas of Financial, Maintenance, Procurement, and Drug and Alcohol.

Financial

Non-ARRA Grants. Use the following systematic approach when selecting the ECHO sample. Using this approach, the reviewer will prepare a list of disbursement transactions to examine during the site visit. The terms used in this discussion are defined as follows:

ECHO drawdown is the complete ECHO drawdown prepared by the grantee.

ECHO transaction is the line item on the disbursements and refunds report from TEAM-Web. An ECHO drawdown may include one or several ECHO transactions.

Underlying transaction is the grantee’s supporting documentation, such as invoices, checks and personnel data. An ECHO transaction may include one or several underlying transactions.

FTA’s goal is to review a judgmentally selected sample of a minimum of nine ECHO transactions. To accomplish this, perform the following steps:

1. Download TEAM Data – Prior to the site visit, prepare a list of ECHO transactions for the period from the date of the last site visit to the date of the current site visit using TEAM-Web data. These data can be downloaded using the disbursements and refunds report under the Dynamic Query>>Data Query menu.

2. Select ECHO Transactions – Select at least three ECHO transactions from each year of the review period.

Use the following characteristics as guide for selecting these transactions:

Select from different grant programs (i.e., 5307, 5309, 5316, 5317)

Select from different financial purpose codes. Common financial purpose codes are:

o 00 - Capital o 01 - Research & Training o 02 - Planning o 03 - Elderly and Disabled o 04 - Operating Assistance o 05 - Project Administration o 06 - State Administration o 07 - RTAP o 08 - ADA Paratransit o 09 - Multiple Types

Select large capital draws

Select preventive maintenance

Select flat dollar amounts such as $80,000

Select any unusual credits that appear to be systematic

Triennial Review Contractor Standard Operating Procedures 17 FY2013

3. Prior to the site visit, request that the grantee have available the entire ECHO drawdown that contains the ECHO transactions you selected, along with supporting documentation.

4. During the site visit, analyze the selected ECHO transactions to identify the underlying transactions.

Underlying transactions consist of checks, invoices, personnel data, etc.

5. The following attributes should be tested:

a. Ensure that an individual other than the one preparing the drawdown approves the drawdown.

b. Ensure that someone other than the approving official draws the funds.

c. Ensure that the individual approving ECHO drawdowns is either the registered ECHO approving official or a person to whom this person has delegated the authority in writing. The approving official appears on the print out of the ECHO screen.

d. Ensure the sum of the underlying transactions equals the amount of the ECHO transactions selected in Step 2.

e. For each selected ECHO transaction, select a minimum of one underlying transaction to verify that supporting source documents such as cancelled checks, paid bills, payrolls, time and attendance records, contracts, and subgrant award documents are maintained to support the underlying transaction(s) selected.

f. Ensure that expenses tested are at the correct Federal share and are reasonable, allowable, and allocable to the grant charged.

g. Ensure that advanced funds drawn down were expended within three business calendar days.

6. Complete the attached table for the ECHO selections

ARRA Grants. Select one ECHO transaction from each active ARRA grant. For those selections, review each underlying transaction, up to a maximum of five.

Triennial Review Contractor Standard Operating Procedures 18 FY2013

Procurement

Request that the grantee provide a list of FTA-assisted procurements carried out during the review period. In consultation with the Regional Office, select a sample for examination during the site visit. The sample should include, as applicable:

Up to two small purchases. These include procurements that are greater than $3,000 but less than the simplified acquisition threshold (currently $100,000). These procurements must be awarded competitively and must include applicable FTA clauses (see Exhibit 6.2).

At least one sole source procurement or other non-competitive procurement

Up to six procurements that exceed the simplified acquisition threshold (currently set at $100,000) in the following categories:

o Construction o A&E o Non-A&E professional services o Supplies o Operations/management o Rolling stock o ARRA funded projects

As part of the review of procurement files, examine the applicable requirements for four other review areas:

Disadvantaged Business Enterprise, Buy America, Debarment and Suspension, and Lobbying.

Maintenance

Selection of Vehicle Maintenance Records. Ask the grantee to prepare a list of federally funded vehicles by mode and select a sample of these for examination during the site visit.

Select a minimum of three vehicles up to a total of one percent of the FTA funded fleet for each mode. Modes are classified according to NTD definitions as follows:

Non-Rail Modes Rail Modes

Motorbus - DO Light Rail

Motorbus - PT Heavy Rail

Demand Response - DO Commuter Rail*

Demand Response - PT Cable Car

Trolleybus Automated Guideway

Ferryboat Monorail

Vanpool Inclined Plane

Jitney Aerial Tramway

Público

* Not Sampled

For grantees that use a combination of directly operated (DO) and purchased transportation (PT), treat the DO and PT portions as separate modes. For larger grantees that use multiple Contractors, treat each Contractor visited as a mode.

For grantees with subrecipients, treat the subrecipients visited as a mode. Consult with the Regional Office in selecting

Triennial Review Contractor Standard Operating Procedures 19 FY2013 the garages, Contractors, and subrecipients to visit. To the extent practical, distribute the sample of vehicles selected by age and subfleet in each mode.

The following example illustrates this process for a grantee that operates the following:

Mode Fleet Size Sample Size

Motorbus-DO 400 4 vehicles

Motorbus-PT 250 3 vehicles

Paratransit-PT 120 3 vehicles

Light Rail 55 3 vehicles

In this example, the reviewer will examine the preventive maintenance records for 13 vehicles distributed across the modes as shown above. The reviewer should keep each sample group separate by mode.

Check preventive maintenance inspection intervals by reviewing management reports used by the grantee for monitoring preventive maintenance inspections and by reviewing a selected sample of FTA funded vehicles, which are still within their useful life, for each mode operated by the grantee and/or its Contractor(s). Contractors may rely only on management reports if, after exploring the source of the data, the Contractor is assured that the data are accurate.

For each vehicle chosen, examine the preventive maintenance history for the preceding 12 months. Note the date when each inspection was accomplished and record the vehicle mileage (or hours) at the time of each inspection. Inspections that are no later than 10 percent of mileage or time schedule or 500 miles, whichever is greater, are considered on time.

For example, a scheduled 6,000 mile inspection would be considered “on time” if it was performed any time before 6,600 miles. If the grantee uses a different definition of an “on time” inspection, use the grantee’s definition if it is deemed appropriate.

Preventive maintenance inspections for a mode are on time when at least 80 percent of the inspections for the sample are conducted on time.

In lieu of selecting a sample of PM records for commuter rail locomotives and cars, make a determination based on compliance letters issued to the grantee by Federal Railroad Administration (FRA). If the grantee is unable to provide a compliance letter from FRA, sample the commuter rail fleet.

Selection of Facility and Equipment Maintenance Records. Request a copy of the latest inventory of FTA funded facilities and equipment from the grantee. If the grantee operates a commuter railroad, ask the grantee to identify those FTA funded items that are not regulated by the FRA. Select a sample of three facility and three equipment items to examine during the site visit. Limit the sample to critical items, such as fire suppression systems, hoists, lifts, transformers, and catenary, and ADA accessibility features, such as elevators, escalators, and lifts.

Drug and Alcohol Program

Select up to four policies for the agency consisting of at least one (as applicable) for grantee subrecipient operations Contractor maintenance Contractor lessee