City of Lathrop
P2545-0027
Proposition 1B Bond Program Project Number 0013000252
Date Issued: 12/28/2017
Attached is the audit report pertaining to the audit performed on the following Proposition 1B (Prop 1B) project:
Project Name
Lathrop Road Grade Separation
Project Number
001300052
P Number
P2545-0027
Amount Audited
$5,000,000.00
The project's implementing agency is the City of Lathrop. The project was funded using Proposition 1B Highway Railroad Crossing Safety Account funds. The Audit was for the period of July 17, 2013, through April 6, 2016.
As required by the Governor's Executive Order S-02-07 and SB88, the expenditures of bond proceeds and outcomes are subject to audit. The audit was performed by the Department of Finance on behalf of Caltrans. Deputy Directive 100-R1, "Departmental Responses to Audit Reports" cites responsibilities of Division Chiefs relative to audits performed. The audit disclosed the following finding:
Finding: Questioned Construction Engineering Expenditures - The City claimed ineligible construction engineering for City personnel totaling $18,526.
- The City claimed $9,554 of ineligible direct personnel expenditures for the Public Works Director and support staff. The Public Works Director and support staff Costs are indirect costs recoverable through the Caltrans approved Indirect Cost Rate (ICR).
- The City claimed $6,062 of ineligible indirect expenditures because the City used an ICR that was higher than the Caltrans approved ICR.
- The City claimed $2,910 of ineligible direct personnel expenditures. The unsupported expenditures stemmed from the City using 1,792 hours as the divisor to calculate the hourly billing rate. The City should have used 2,080 hours as the divisor (52 workweek X 40 hours per week). According to the City, 1,792 hours was used to account for vacation and sick leave benefits. Vacation and sick leave benefits should be recovered through an approved benefits rate or ICR.
Hourly rates above amounts actually paid are not eligible for reimbursement.
Please provide Audits and Investigations a corrective active resolution (CAR) on the audit finding within 90 days of this memorandum's date and reference the project number above on the CAR.