y§z)
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Site Visit Report
American Recovery and
Reinvestment Act Site Visit of the
Wastewater Treatment Facility
Improvements Project,
Perkins, Oklahoma
Report No. 11-R-0214
May 2, 2011
-------
Report Contributors: Safiya Chambers
Bill Spinazzola
Leah Nikaidoh
Michael Rickey
John Trefry
Cover photo: Construction site of the wastewater treatment facility improvements project in
Perkins, Oklahoma. (U.S. Environmental Protection Agency Office of
Inspector General photo)
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail: OIGJHotline@epa.gov write: EPA Inspector General Hotline
phone: 1-888-546-8740 1200 Pennsylvania Avenue NW
fax: 703-347-8330 Mailcode 8431P (Room N-4330)
online: http://www.epa.gov/oig/hotline.htm Washington, DC 20460
-------
I
U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
11-R-0214
May 2, 2011
Why We Did This Review
The U.S. Environmental
Protection Agency Office of
Inspector General conducts site
visits of American Recovery and
Reinvestment Act of 2009
(Recovery Act) clean water and
drinking water projects. The
purpose of the visits is to confirm
compliance with selected
Recovery Act requirements.
We selected a project located in
Perkins, Oklahoma, for review.
Background
The Perkins Public Works
Authority received a $7,225,000
loan from the State of Oklahoma
Water Resources Board through
the state's Clean Water State
Revolving Fund Financing
Program. The purpose of the loan
was to improve the wastewater
treatment facility in order to meet
its permitted discharge
requirements. The loan included
$2 million in Recovery Act funds
for loan forgiveness. The public
works authority was required to
repay the remaining loan amount
of $5,225,000 over 20 years.
Catalyst for Improving the Environment
American Recovery and Reinvestment Act
Site Visit of the Wastewater Treatment Facility
Improvements Project, Perkins, Oklahoma
What We Found
We conducted an unannounced visit of the construction site of the Perkins
Public Works Authority's wastewater treatment facility improvements project
in Perkins, Oklahoma, on April 19-22, 2010. We toured the project site;
interviewed public works, engineering, and contractor personnel; and reviewed
documentation related to Recovery Act requirements.
Based upon our site visit, we did not identify any issues that would require
action by the Perkins Public Works Authority, the State of Oklahoma, or the
U.S. Environmental Protection Agency.
For further information,
contact our Office of
Congressional, Public Affairs and
Management at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/20117
20110502-11-R-0214.pdf
-------
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
S WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
May 2, 2011
MEMORANDUM
SUBJECT: American Recovery and Reinvestment Act Site Visit of the
Wastewater Treatment Facility Improvements Project, Perkins, Oklahoma
Report No. ll-R-0214
FROM: Arthur A. Elkins, Jr. ^^ . —
Inspector General
TO: Al Armendariz
Regional Administrator, Region 6
U.S. Environmental Protection Agency
This is our report on the subject site visit conducted by the Office of Inspector General of the
U.S. Environmental Protection Agency. The report summarizes the results of our site visit of the
City of Perkins, Oklahoma, wastewater treatment facility improvements project.
We performed this site visit as part of our responsibility under the American Recovery and
Reinvestment Act of 2009 (Recovery Act). The purpose of our site visit was to determine the
city's compliance with selected requirements of the Recovery Act pertaining to the Clean Water
State Revolving Fund program. The Oklahoma Water Resources Board approved the city's
project and awarded a loan of $7,225,000. The loan included $2 million in Recovery Act funds
for principal forgiveness.
The estimated direct labor and travel costs for this report are $98,549.
Action Required
Because this report contains no recommendations, you are not required to respond to this report.
The report will be made available at http://epa.gov/oig. If you or your staff have any questions
regarding this report, please contact Melissa Heist, Assistant Inspector General for Audit, at
(202) 566-0899 or heist.melissa@epa.gov: or Robert Adachi, Product Line Director, at
(415) 947-4537 or adachi.robert@epa.gov.
-------
Purpose
The purpose of our unannounced site visit was to determine whether the Perkins
Public Works Authority, Perkins, Oklahoma, had complied with selected
requirements of the American Recovery and Reinvestment Act of 2009 (Recovery
Act), P.L. 111-5, pertaining to the Clean Water State Revolving Fund program.
Background
The Perkins Public Works Authority, a public trust with the City of Perkins,
received a $7,225,000 loan from the State of Oklahoma Water Resources Board
through the state's Clean Water State Revolving Fund Financing Program. The
purpose of the loan was to improve the wastewater treatment facility in order to
meet its permitted discharge requirements. The loan included Recovery Act funds
of $2 million for loan forgiveness. The public works authority must repay the
remaining loan amount of $5,225,000 over 20 years.
The estimated cost of the project in May 2008 was $5.2 million; $4 million of the
cost was for construction. In May 2009, the estimated project cost increased to
over $7.2 million, primarily due to the increase in actual construction costs to
almost $5.9 million. As of May 24, 2010, expenditures for the project totaled
$3.7 million.
Scope and Methodology
Due to the time-critical nature of Recovery Act requirements, we did not perform
this assignment in accordance with generally accepted government auditing
standards. We did not perform certain steps that would allow us to obtain
information to assess the public works authority's internal control and any
previously reported audit concerns. As a result, we do not express an opinion on
the adequacy of internal control, or compliance with all federal, state, or local
requirements.
We conducted our unannounced site visit from April 19-22, 2010. During our
visit, we:
1. Toured the proj ect
2. Interviewed public works authority, engineering, and contractor personnel
3. Reviewed documentation maintained by the public works authority, its
engineer, and project contractors on the following matters:
a. Buy American requirements under Section 1605 of the Recovery
Act
b. Wage rate requirements under Section 1606 of the Recovery Act
c. Limits on funds and reporting requirements under sections 1604
and 1512 of the Recovery Act
d. Contract procurement
11-R-0214
-------
Results of Site Visit
Based upon our site visit, we did not identify any issues that would require action
by the Perkins Public Works Authority, the State of Oklahoma, or the U.S.
Environmental Protection Agency. We have summarized our results in the
following sections.
Buy American Requirements
We found that the public works authority's construction contractor, Quicksilver
Construction Company, Inc., complied with the Buy American provisions of the
Recovery Act. Quicksilver completed a Buy American certification and obtained
a certification from its subcontractor and suppliers. When ordering equipment and
supplies, Quicksilver personnel stated that they specified that the item must be
made in America. They also stated that they verified that a product was American
made when it was delivered to the construction site. We noted that supplies stored
at the site were stamped "made in America."
Wage Rate Requirements
The construction contractor complied with Section 1606 of the Recovery Act. We
interviewed all nine employees at the construction site on April 20, 2010. We
compared pay rates and labor categories stated by employees during the interview
to the contractor's certified payroll to identify significant differences. We also
compared the pay rates to those specified by the U.S. Department of Labor for
heavy construction workers in Payne County, Oklahoma (the county where
Perkins is located). All of the employees were paid at rates higher than those
specified by the U.S. Department of Labor.
Representatives from the Oklahoma Water Resources Board also conducted wage
rate interviews for five contractor employees at the site on November 18, 2009,
and compared the employees' stated pay rates to those specified in the
contractor's records. No exceptions were noted.
Limits on Funds and Reporting
We reviewed the public works authority's loan documentation and visited the
construction site to ensure the public works authority was in compliance with
section 1604 of the Recovery Act, which states that no Recovery Act funds can be
used for any casino, other gambling establishment, aquarium, zoo, golf course, or
swimming pool. We did not identify any issues of concern.
We concluded that the public works authority was in compliance with its
responsibilities under Section 1512 of the Recovery Act which requires reports on
the use of funds and the number of jobs created or retained.
11-R-0214
-------
The public works authority prepared reimbursement requests for eligible incurred
costs. Each reimbursement request in our sample was supported with copies of
checks, contractor pay estimates, and contractor and vendor invoices. The
construction contractor prepared the pay estimates. The design engineer and the
city manager reviewed and approved the pay estimates. In our sample of
reimbursement requests, the total amount of each request agreed to the
expenditures recorded in the general ledger without exception.
Procurement Practices
We found that the public works authority complied with its stated procurement
practices for construction contracts. Bids were advertised publicly. The project
was based on the approved plan and specifications, and the plan included
Recovery Act requirements for Buy American and wage rate requirements. Six
bidders responded to the advertisement, and the lowest bidder—Quicksilver
Construction, Inc., Norman, Oklahoma—was selected. Quicksilver's bid amount
of $5,875,349 exceeded the engineer's estimated construction costs of $3,977,500.
Recommendations
We have no recommendations.
Response and Office of Inspector General Comment
Because we have no recommendations, we did not require or receive comments to
the draft report. On April 7, 2011, we held an exit conference with representatives
from the U.S. Environmental Protection Agency's Region 6, the Oklahoma Water
Resources Board, and the City of Perkins.
11-R-0214
-------
Status of Recommendations and
Potential Monetary Benefits
POTENTIAL MONETARY
RECOMMENDATIONS BENEFITS (in $OOOs)
Planned
Rec. Page Completion Claimed Agreed-To
No. No. Subject Status1 Action Official Date Amount Amount
No recommendations
0 = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is undecided with resolution efforts in progress
11-R-0214
-------
Appendix A
Distribution
Office of the Administrator
Regional Administrator, Region 6
Director, Grants and Interagency Agreements Management Division,
Office of Administration and Resources Management
Agency Followup Official (the CFO)
Agency Followup Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Audit Followup Coordinator, Region 6
Public Affairs Officer, Region 6
Executive Director, Oklahoma Water Resources Board
Director, Oklahoma Water Resources Board, Financial Assistance Division
Mayor and Chairman of the Perkins Public Works Authority, City of Perkins, Oklahoma
City Manager, City of Perkins, Oklahoma
11-R-0214
------- |