TEXAS WATER COMMISSION
B. J. Wynne, III, Chairman
John E. Birdwell, Commissioner
Cliff Johnson, Commissioner
John J. Vay, Genera) Counsel
Michael E. Field, Chief Hearings Examiner
Brenda W. Foster, Chief Clerk
Allen Beinke, Executive Director
February 28, 1990
'CERTIFIED MAIL
RETURN RECEIPT REQUESTED
rfr. Mike Parker, Controller
Espey Huston and Associates
P. O. Box 519
Austin, Texas 78767
Re: Audit by Environmental Protection Agency
Highlands Acid Pits, Cooperative Agreement V006454-01
September 30, 1982 to September 30, 1989 /
Dear Mr. Parker:
40 CFR, Part 35, Subpart E, Appendix D, Paragraph 2.b(4) states that
under cost plus fixed fee contracts "All direct costs, overhead, and
other indirect costs claimed will be audited to determine that they
are reasonable, allowable, and properly supported by the consulting
engineer's records. In Amendment No. 1, dated June 27, 1988 to the
prime A/E Contract Article S.b.l.b states that the overhead "Rate
shall be adjusted downward if the final audited rate, based on
federal procurement regulations, for the period of the agreement, is
less than the provisional rate."
In a letter dated January 15, 1988 the TWC advised Espey Huston that
$7,443 of questioned (i.e., disallowed) costs on Phases I and II
were being withheld from the accrued retainage of the Phase III
(Remedial Action) of the Highlands Acid Pit site.
This most recent audit has concluded that an additional $432.00 V
in questioned (i.e., disallowed) costs are due from Espey Huston and
$1,312.00 in questioned (i.e., disallowed) costs are due from your
subcontractor Roy F. Weston, Inc. (see Attachment A).
The performance of the subcontractor is the responsibility of the
prime - thus the Texas Water Commission hereby notifies Espey Huston
that an additional $432.00 for Espey Huston and an additional
$1,312.00 for your subcontractor (Roy F. Weston, Inc.) will be
withheld from the retainage accrued on the Highlands Acid Pit Site.
: r>
,c 7o-»n inoi
ft,,,, r^A
-------
Thank you for your assistance in the resolution of this audit
dispute determination.
Sincerely,
Dick Ehlert
Program Administrator, Superfund
Hazardous and Solid Waste Division
RE/jdh
cc: John DiFilippo Jr., P.E.
Roy F. Weston, Inc.
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Addendum to Attachment 1
Notes 2 and 3 of Highlands
Acid Pits Audit Findings
-------
Note 2 - Audited Overhead Rates
Espey:
EPA/OIG conducted an interim audit on the Highlands Acid Pit project for
the period July 4, 1983 to September 30, 1986, report number
E5bG7-06-0032-71762 issued on August 25, 1987. That report presented
.questioned overhead costs of 57,443 on Phases I and II of the project.
A Final Dispute Determination dated January 15, 1988, indicates that the
$7,443 is to be disallowed and that EPA is accepting the TWC's proposal to
reclaim the disallowed costs from the retainage that had accrued on the
Remedial Action Phase, or Phase III of the Highlands Acid Pit Site. The Texas
Water Commission has withheld the retainage.
During our audit period we determined that one additional A/E invoice had
been processed that was likewise subject to the final overhead rates
established by the prior audit. Invoice No. 85-11-0675 reflects a period of
performance of October 1, 1985 to December 21, 1985 and reouested payment in
the amount of 512,473. The following computation sets forth an additional
$432 of questioned overhead costs:
Claimed Accented Questioned
Direct Labor $ 2,523 $ 2,523 $
Benefits & Overhead Rate .2649 .2384
Benefit Cost $ 668 $ 601 $ 67
Direct Labor & Benefits $ 3,191 $ 3,124
Indirect Overhead • 1.1911 1.0997
Indirect Cost S 3,801 S 3,436 $ 365
Total Benefits & indirects $ 4,469 S 4,037 S 432
In summary, we have questioned $7,875 ($7,443 + $432) of excess Espey
overhead and provided for the reinstatement of $7,443 as discussed by Note 3.
Weston, Inc.:
The previously mentioned EPA/OIG interim audit also set-aside 533,998 of
Weston overhead billed by provisional rates for 1984 and 1985. The Defense
Contract Audit Agency (DCAA) issued final audited overhead rates for these
years which are less than those proposed by Weston, Inc. We also determined
that during the current audit period Invoice No. 85-11-0075 was processed and
-------
increased tn^
application of
follows:
.laimed overhead to $37,172 for ;;: '; riod. The
inal rates results in 51,312 of ques;: r.'••;•-. ,verhead as
Year
1984
1985
Allowable
Claimed
Questioned
Direct
Labor
$12,386
15,563
lowable
124.44£
131.38
;i5,413
70,447
.35,860
37.172
3 1,312
Summary:
40 CFR, Pa:
under cost plus
indirect costs ;
allowable and
Additionally, .
No. 14-60063, .
be adjusted de-
regulations, v:. ,•
rate." The ret'"..-
contract and :•;.
59,187 of overii..
Consultant
35,
Subpart E, Appendix D, Paragraph 2.b.(4) states that
i.xed fee contracts "All direct costs, overhead, and other
•i^iGd will be audited to determine that they are reasonable,
;>?rly supported by the consulting engineer's records."
.r.ent No. 1, dated June 27, 1988 to the prime A/E Contract
o1 Article B.b.l.b. to state that the overhead "rate shall
;-d if the final audited rate, based on federal procurement
:hc period of the agreement, is less than the provisional
pursuant to Appendix D, Amendment No. 1 to the Prime A/E
results of the above mentioned audit, we are questioning
in excess of audit determined rates as follows:
Espey - Prior Audit
- Current Audit
Weston (Subcontractor) '
Total Questioned Overhead
Questioned
$7,443
432
1,312
$9,187
TWC Comments
Audit Resoonse
Note 3 - Resolution of Prior Audit Questioned Overhead
As stated earlier, a final dispute determination set forth that
previously questioned overhead costs of the prime consultant would be settled
by TWC's action of reclaiming the questioned amount from a retainage due Espey
on a subsequent invoice. This audit determined that TWC properly withheld and
did not pay eligible A/E costs in settlement of the questioned amount.
-------
Attachment 2
Letter to Roy F. Weston, Inc.
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TEXAS WATER COMMISSION
|B. J. Wynne, III, Chairman
John E. Birdwell, Commissioner
Cliff Johnson, Commissioner r
John J. Vay, General Counsel
Michael E. Field, Chief Hearings Examiner
Brenda W. Foster, Chief Clerk
Allen Beinke, Executive Director
February 27, 1990
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. John DiFilippo Jr., P.E.
Roy F. Weston Inc.
5599 San Felipe
Suite 700
Houston, Texas 77056
Re: Audit by Environmental Protection Agency
Highlands Acid Pits, Cooperative Agreement V006454-01
Dear Mr. DiFilippo Jr., P.E.
I have enclosed as an attachment a letter to Espey Huston advising
them of certain costs that have been questioned (i.e. disallowed) by
the Office of Inspector General (DIG) of the Environmental
Protection Agency on the above referenced Superfund site. This
audit finding includes $1,312.00 as questioned (i.e. disallowed)
costs by Roy F. Weston Inc.
The TWC has notified Espey Huston that as the prime consultant to
the contract and responsible for the subcontractors actions, that
$1,312.00 will be withheld from the retainage of Espey Huston.
Please see note 2 of the attachment outlining Roy F. Weston's
questioned (i.e. disallowed) costs in the amount of $1,312.00.
Thank you.
Sincerely,
Dick Ehlert
Program Administrator
Superfund and Emergency Response Section
Hazardous and Solid Waste Division
DE:sr
cc: Mr. Mike Parker, Controller
Espey Huston & Associates
-------
ENVIRONMENTAL PROTECTION AGENCY
HIGHLANDS ACID PIT
COOPERATIVE AGREEMENT V006454-01
TEXAS WATER COMMISSION
SEPTEMBER 30, 1982 TO SEPTEMBER 30, 1989
DECEMBER 1, 1989
-------
Texas Water Commission
Highlands Acid Pit
Cooperative Agreement V006454-01
TABLE OF CONTENTS
Page No.
Auditor's Report 1
Report on Internal Accounting Control 3
Report on Compliance 4
Exhibit A Texas Water Commission
Statement of Costs Claimed
and EPA Eligible Costs for the Period
September 30, 1982 through September 30, 1989 5
Schedule A Texas Water Commission
Statement of Costs Claimed, Accepted, and
Questioned for the Period
September 30, 1982 through September 30, 1989 6
Notes to Schedule A 7
Grantee Comments 12
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SUITE 406
1221 BALTIMORE AVE.
KANSAS CITY, MO 64105
(816) 221-4559
CERTIFIED PUBLIC ACCOUNTANTS
McBRIDE, LOCK &'ASSOCIATES
INDEPENDENT AUDITOR'S REPORT
Mr. Michael D. Simmons
Acting Divisional Inspector General for Audits
Southern Division, EPA, Suite 276
1375 Peachtree Street, N.E.
Atlanta, Georgia 30309
We have audited the Statement of Costs Claimed and EPA Eligible Costs
(Exhibit A) for the Texas Water Commission (TWC) under the Cooperative
Agreement V006454-01 awarded September 30, 1982, for the period September 30,
1982 through September 30, 1989. The agreement provided for performing site
investigation and feasibility study, remedial design, remedial action, and
operation and maintenance at the Highlands Acid Pit in Harris County, Texas.
This financial statement is the responsibility of the TWC's management. Our
responsibility is to express an opinion on this financial statement based on
our audit. We did not audit the financial statement of the Site Investigation
and Feasibility phase or the Remedial Design phase of the Cooperative
Agreement, which represent 6 percent and 4 percent, respectively, of the costs
claimed under the agreement. Those financial statements were audited by other
auditors whose report thereon has been furnished to us, and our opinion,
insofar as it relates to the amounts included for those phases, is based
solely on the report of the other auditors.
We conducted our audit in accordance with generally accepted auditing
standards and governmental auditing standards. These standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit and the report of other auditors provide a reasonable basis for our
opinion.
The Statement of Costs Claimed and EPA Eligible Costs (Exhibit A) was
prepared on the basis of regulations and criteria established by the
Environmental Protection Agency relating to EPA/State Cooperative Agreements
under the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) of 1980 (PL 96-510). Accordingly, Exhibit A is not intended to
present financial position and results of operations in conformity with
generally accepted accounting principles.
As part of our examination, we determined the allowability of costs
claimed as EPA eligible under the project in accordance with the provisions of
the cooperative agreement and applicable Federal regulations. Schedule A sets
forth the costs which we questioned in this regard and includes an explanation
of the reasons such costs were questioned.
-------
In our opinion, based upon our audit and the report of other auditors,
subject to the affects on Exhibit A of EPA's ultimate resolution of the
questionable expenditures referred to in the preceding paragraph, Exhibit A
fairly presents the financial information regarding the costs claimed as EPA
eligible on the basis described above and financial provisions of the
cooperative agreement.
This report is intended for use in connection with the cooperative
agreement to which it refers and should not be used for any other purpose.
McBride, Lock & Associates
Kansas City, Missouri
December 1, 1989
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SUITE 406
1221 BALTIMORE AVE.
KANSAS CITY, MO 64105
(816) 221-4559
CERTIFIED PUBLIC ACCOUNTANTS
McBRIDE, LOCK &'ASSOCIATES
REPORT ON INTERNAL ACCOUNTING CONTROL
Mr. Michael D. Simmons
Acting Divisional Inspector General for Audits
Southern Division, EPA, Suite 276
1375 Peachtree Street, N.E.
Atlanta, Georgia 30309
We have audited the Statement of Costs Claimed and EPA Eligible Costs
(Exhibit A) for the Texas Water Commission (TWC) under the Cooperative
Agreement V006454-01 awarded September 30, 1982, for the period September 30,
1982 through September 30, 1989, and have issued our report thereon dated
December 1, 1989.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement of costs
claimed is free of material misstatement. The Environmental Protection
Agency's OIG Manual for CERCLA Cooperative Agreements, dated August 1985, was
also used as a guide for our examination.
Solely to assist us in planning and performing our audit, we made a study
and evaluation of the internal control structure, as related to the
cooperative agreement, of the Texas Water Commission. That study and
evaluation was limited to a preliminary review of the system to obtain an
understanding of the control environment and the flow of transactions through
the accounting system. Because the audit could be performed more efficiently
through analysis and substantive audit tests, thus placing very little
reliance on the internal control structure, our study and evaluation did not
extend beyond this preliminary review phase. Accordingly, we do not express
an opinion on the internal control structure taken as a whole. Also, our
examination, made in accordance with the standards mentioned above, would not
necessarily disclose material weaknesses in the internal control structure.
However, during our examination we did not become aware of any conditions we
believe to be material weaknesses.
This report is intended for use in connection with the cooperative
agreement to which it refers and should not be used for any other purpose.
McBride, Lock & Associates
Kansas City, Missouri
December 1, 1989
-------
SUITE 406
1221 BALTIMORE AVE.
KANSAS CITY, MO 64105
(816) 221-4559
CERTIFIED PUBLIC ACCOUNTANTS
McBRIDE, LOCK &'ASSOCIATES
REPORT ON COMPLIANCE
Mr. Michael D. Simmons
Acting Divisional Inspector General for Audits
Southern Division, EPA, Suite 276
1375 Peachtree Street, N.E.
Atlanta, Georgia 30309
We have audited the Statement of Costs Claimed and EPA Eligible Costs
(Exhibit A) for the Texas Water Commission (TWC) under the Cooperative
Agreement V006454-01 awarded September 30, 1982, for the period September 30,
1982 through September 30, 1989 and have issued our report thereon dated
December 1, 1989.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement of costs
claimed is free of material misstatement. The Environmental Protection
Agency's OIG Manual for CERCLA Cooperative Agreements, was also used as a
guide for our examination.
Compliance with laws, regulations, contracts, and agreements applicable
to the Texas Water Commission is the responsibility of TWC's management. As
part of obtaining reasonable assurance about whether the statement of claimed
costs is free of material misstatement, we performed tests of TWC's compliance
with certain provisions of laws, regulations, contracts, and agreements.
However, our objective was not to provide an opinion on overall compliance
with such provisions.
The results of our tests indicate that, with respect to the items tested,
the Texas Water Commission, complied, in all material respects, with the
provisions referred to in the preceding paragraph. With respect to items not
tested, nothing came to our attention that caused us to believe that TWC had
not complied, in all material respects, with those provisions.
This report is intended for use in connection with the cooperative
agreement to which it refers and should not be used for any other purpose.
McBride, Lock & Associates
Kansas City, Missouri
December 1, 1989
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Exhibit A
TEXAS WATER COMMISSION
Highlands Acid Pit
Statement of Costs Claimed and EPA Eligible Costs
For the Period September 30, 1982 through September 30, 1989
Cooperative Agreement V006454-01
Project Phase
Site Investigation and
Feasibility Study
Remedial Design
Remedial Action
Operation and Maintenance
Claimed
Accepted
Questioned
$
5
394,715
228,800
,791,215
49,877
$ 388,088
226,240
5,791,068
49,838
$ 6,627
2,560
147
39
Total Claimed
Retainage Not Paid and
Used as Credit Against
Questioned Overhead Costs
Total Project Costs
Federal Share
$6,464,607
7.443
$6.472.050
$6,455,234
7,443
$6.462.677
$5,877,842
$ 9,373
$ 9,373
$ 9.354
See Schedule A-l for a detail statement of costs claimed, accepted and
questioned.
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Schedule A
TEXAS WATER COMMISSION
Highlands Acid Pit
Statement of Costs Claimed, Accepted and Questioned
For the Period September 30, 1982 Through September 30, 1989
Cooperative Agreement V006454-01
Description
Salaries
Release Time
Total Salaries
Fringe Benefits
Travel
Equipment
Supplies
Contractual
Construction
Other
Indirect Expense
Total Claimed
Add: Retainage Not
Paid and Used
As Credit
Against
Questioned
Overhead
Questioned as not
$
$
Claimed
125,153
20,261
145,414
32,349
16,044
418
740
781,914
5,419,350
389
67,989
Accepted
$ 125
20
$ 145
32
16
111
5,419
67
,153
,205
,358
,341
,044
418
740
,727
,350
389
,867
Eligible
$ -0-
56
$ 56
8
-0-
-0-
-0-
9,187
-0-
-0-
122
Supported
$ -0-
-0-
$ -0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Necessary
$-0-
-0-
$-0-
-0- .
-0-
-0-
-0-
-0-
-0-
-0-
-0-
$6,464,607 $ 6,455,234 $9,373 $ -0-
7.443
7,443
-0-
-0-
Total Project Costs $6,472,050 $ 6,462.677 $9,373 $ -0-
Federal Share
Federal Funds
Received
Balance Due EPA
$ 5,877,842*
5.880,498
$ 2,656
$-0-
-0-
$-0-
* This amount should not be construed as being the final determination of the
Federal share of accepted eligible costs. The amount may vary depending
upon the resolution by EPA of questioned costs of $ 9,373.
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TEXAS WATER COMMISSION
Notes to Schedule A
Note 1 - Release, Fringe and Indirect Rates
T--
The $186 of ineligible questioned costs, comprised of a combination of
release, fringe and indirect rate overcharges, is the result of applying final
rates to the direct labor charges for the fiscal year ended August 31, 1988.
The following computations detail the questioned costs pursuant to OMB
Circular A-87, Attachment A, Sections A(l) and F(2)(a)(2):
Description
Negotiated
Personnel Rate Allowable Claimed Questioned
Release - Phase III $4,284
Phase IV 1,120
Total Release Time
14.75*
14.75
$ 632
165
$ 676
177
$ 44
12
56
Fringe - Phase III 4,916
Phase IV 1,285
Total Fringe Benefits
22.74
22.74
1,118
292
1,124
294
6
_2
8
Indirect - Phase III 4,916
Phase IV 1,285
Total Indirect Expense
52.15
52.15
2,563
670
2,660
695
97
25
122
Total Ineligible Questioned Cost
$186
TWC Comments
No comment was made.
Audit Response
Questioned costs of $186 should be returned to the EPA.
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Note 2 - Audited Overhead Rates
Espey:
r-
EPA/OIG conducted an interim audit on the Highlands Acid Pit project for
the period July 1, 1983 to September 30, 1986, report number
E5bG7-06-0032-71762 issued on August 25, 1987. That report presented
questioned overhead costs of $7,443 on Phases I and II of the project.
A Final Dispute Determination dated January 15, 1988, indicates that the
$7,443 is to be disallowed and that EPA is accepting the TWC's proposal to
reclaim the disallowed costs from the retainage that had accrued on the
Remedial Action Phase, or Phase III of the Highlands Acid Pit Site. The Texas
Water Commission has withheld the retainage.
During our audit period we determined that one additional A/E invoice had
been processed that was likewise subject to the final overhead rates
established by the prior audit. Invoice No. 85-11-0675 reflects a period of
performance of October 1, 1985 to December 21, 1985 and requested payment in
the amount of $12,473. The following computation sets forth an additional
$432 of questioned overhead costs:
Claimed Accepted Questioned
Direct Labor $ 2,523 $ 2,523 $
Benefits & Overhead Rate .2649 .2384 1
Benefit Cost $ 668 $ 601 $ 67
Direct Labor & Benefits $ 3,191 $ 3,124 $
Indirect Overhead 1.1911 1.0997
Indirect Cost $ 3.801 $ 3.436 $ 365
Total Benefits & Indirects $ 4,469 $ 4,037 $ 432
In summary, we have questioned $7,875 ($7,443 + $432) of excess Espey
overhead and provided for the reinstatement of $7,443 as discussed by Note 3.
Weston, Inc.:
The previously mentioned EPA/OIG interim audit also set-aside $33,998 of
Weston overhead billed by provisional rates for 1984 and 1985. The Defense
Contract Audit Agency (DCAA) issued final audited overhead rates for these
years which are less than those proposed by Weston, Inc. We also determined
that during the current audit period Invoice No. 85-11-0675 was processed and
-------
increased the total claimed overhead to $37,172 for this period. The
application of DCAA's final rates results in $1,312 of questioned overhead as
f ol1ows:
Direct Final Allowable
Year Labor Rate Overhead
1984 T $12,386 124.44X $15,413
1985 15,563 131.38 20,447
Allowable ' $35,860
Claimed 37.172
Questioned Overhead $ 1,312
Summary:
40 CFR, Part 35, Subpart E, Appendix D, Paragraph 2.b.(4) states that
under cost plus fixed fee contracts "All direct costs, overhead, and other
indirect costs claimed will be audited to determine that they are reasonable,
allowable and properly supported by the consulting engineer's records."
Additionally, Amendment No. 1, dated June 27, 1988 to the prime A/E Contract
No. 14-60063, revised Article 5.b.l.b. to state that the overhead "rate shall
be adjusted downward if the final audited rate, based on federal procurement
regulations, for the period of the agreement, is less than the provisional
rate." Therefore, pursuant to Appendix D, Amendment No. 1 to the Prime A/E
contract and the results of the above mentioned audit, we are questioning
$9,187 of overhead in excess of audit determined rates as follows:
Consultant Questioned
Espey - Prior Audit $7,443
- Current Audit 432
Weston (Subcontractor) 1,312
Total Questioned Overhead $9,187
TWC Comments
Agreed with finding and will withhold the questioned amount from
retainages due the A/E.
Audit Response
Questioned costs of $9,187 should be returned to the EPA.
Note 3 - Resolution of Prior Audit Questioned Overhead
As stated earlier, a final dispute determination set forth that
previously questioned overhead costs of the prime consultant would be settled
by TWC's action of reclaiming the questioned amount from a retainage due Espey
on a subsequent invoice. This audit determined that TWC properly withheld and
did not pay eligible A/E costs in settlement of the questioned amount.
-------
For report presentation purposes the amount in question remains as a
reported cost on the final FSRs for Phase I ($6,627) and Phase II (816) which
is reflective of closeout submissions by TWC. At a later date, TWC reduced
Phase III reported costs by $7,443 ($6,627 + $816) thereby offsetting the
disallowance. Since the offset is not presented on Phase III cost reports,
the audit report has adjusted the presentation of total claimed costs to
incorporate the recognition of offset, thereby netting to zero the
disallowance.
The only audit exception taken to this methodology is that the previously
questioned costs have a federal share of 100% and current reinstatement costs
incorporate a 90% federal share. These procedures result in a 10% loss of
federal share to EPA in the amount of $744. This loss is recaptured by this
report as discussed and presented by Note 5.
TWC Comments
No comment.
Audit Response
The costs remain questioned as presented by Note 5.
Note 4 - Federal Share
Federal
Phase Participation
I 100%
II 100
III 90
IV 90
Total Claimed
Note 3 - Phase III
Cost - 90% Federal
Total Project Costs
Accepted
$ 388,088
226,240
5,791,068
49,838
7,443
Federal
Share
$ 388,088
226,240
5,211,961
44,854
6.699
Questioned
$ 6,627
2,560
147
39
$6,455,234 $5,871,143 $ 9,373
$6,462,677 $5,877.842 $ 9,373
Federal
Share
$ 6,627
2,560
132
35
$ 9,354
$ 9,354
Note 5 - Balance Due EPA
Description
Note 3 - Reinstatement at lessor federal share:
Questioned at 100% Federal Share
Reinstated at 90% Federal Share
Federal Share Due EPA
Note 1 - Release, Fringe & Indirect at 90%
Note 2 - Questioned overhead at 100% ($9,187 less $7,443)
Total Due EPA
Balance
Due EPA
$ 7,443
(6,699)
$ 744
168
1,744
$ 2,656
10
-------
TMC Comments
Agreed with finding and will withhold sufficient funds from the
retainages due the A/E.
Audit Response
r-
Amount should be returned.
Note 6 - Prior Audit Disallowances
As previously discussed, EPA conducted an interim audit on the Highlands
Acid Pit project for the period July 1, 1983 to September 30, 1986, report
number E5bG7-06-0032-71762 issued on August 25, 1987. That report presented
questioned and set-aside costs of $87,000. The current audit position
pertaining to each disallowance is presented below:
Prior
Audit Prior Audit Current Audit
Description Questioned Set-Aside Resolved Questioned
Note 1 - Indirect Costs $ - $19,996 $19,996 $
Notes 2 & 3 - A/E Overhead 7,443 - - 7,443
Note 4 - A/E Subcontractor ^ 59,561 58,288 1.273
Total $7,443 $79,557 $78.284 $8.716
TWC Comments
Agreed with finding.
Audit Response
Resolution should be effected as outlined by Audit Responses to Notes 1,
2, 3, 4 and 5.
11
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GRANTEE COMMENTS
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TEXAS WATER COMMISSION
B. J. Wynne, HI, Chairman
John E. Birdwell, Commissioner
Cliff Johnson, Commissioner *
John J. Vay, General Counsel
Michael E. Field, Chief Hearings Examiner
Brenda W. Foster, Chief Clerk
Alien Beinke, Executive Director
February 28, 1990
Mr. Charles H. McBride
McBride, Lock & Associates
Suite 406
1221 Baltimore Avenue
Kansas City, MO 64105
Re: Environmental Protection Agency
Highlands Acid Pit
Cooperative Agreement VO06454-01
Texas Water Commission
September 30, 1982 to September 30, 1989
Your December 1, 1989 Report
Dear Mr. McBride:
The Superfund Section of the Texas Water Commission would like to
offer the following comments in reply to your above-referenced audit
report in your letter of January 30, 1990.
A. Independent Auditors Report
No comment.
B. Report on Internal Accounting Control
No comment.
C. Report on Compliance
No comment.
D. Schedule A, Statement of Costs Claimed, Accepted and Questioned
Note 1 Release, Fringe and Indirect Rates
No Comment
Note 2; Audited Overhead Rates
See Attachment 1. (Letter to Espey Huston and Associates)
See Attachment 2. (Letter to Roy F. Weston Inc.)
P. O. Box 13087 Capitol Station • 1700 North Congress Ave. • Austin, Texas 78711-3087 • Area Code 512/463-7830
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Note 3; Resolution of Prior Audit Questioned Overhead
No comment.
Note 4; Federal Share
T.
No comment.
Note 5; Balance Due EPA
No comment (see note 2).
Note 6; Prior Audit Disallowances
No comment (see note 2).
Thank you for the opportunity to offer our comments to the draft
report of the tentative report material of your audit review dated
December 1, 1990. The Superfund Section feels that the recovery of
the overpayments to Espey Huston and Roy F. Weston, Inc. will
effectively address the concerns as it pertains to the consultant
contract deficiencies.
Sincerely,
Ja,mejs A. Feeley, ChieJ
Superfund and Emergency Response Section
Hazardous & Solid Waste Division
DE/jdh
Attachments
cc: Jack Carrington, Audit Manager, Office of Inspector General,
U.S. Environmental Protection Agency, 1455 Ross Avenue,
Room 2750, Dallas, Texas 75202-2733
Dan Eden, Director, Hazardous & Solid Waste Division
Randy Cunningham, Fiscal Services
Jim Fowler, Internal Audit
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Attachment 1
Repayment of Questioned Cost
Espey Huston and Associates
Roy F. Weston, Inc.
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