HomeMy WebLinkAboutDocumentation_Workshop_Tab 03_12/03/2018 �� � � �� -�
- - �FFICE OF INSPECTOR GENERAL �~
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PALM BEACH COUNTY �
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lohn A.Carey Inspector General
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2019-A-00�2
V i I I a e of Te u esta
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Sidewalks Rehabilitation and
Construction �antract
November 19 , 2� 18
Insight — Oversight — For�sight
,�r OFFICE OF I�ISPECTOR �ENERAL
r P�'�1f49 BEi'�CH COUN�Y .�t.�
.°' AUDiT REPORT ,
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;`""'"' 2019-A-0002
John A.Carey Inspectvr General
InspedorGenerel C�ATE ISSUED: NOVE141f,ER 19,2�18 Accredited
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VILLAGE OF TEQUESTA— SIDEWALKS REHABILITATION AND �ON5TRUCTIOh1 CONTRAGT
� � Our audit (1) addressed the complainanYs
allegations; (2) determined whether
The Palm Beach County 4ffice of cantrols were adequate related to the
Inspector General (OIG� audited the contract procurement to payment process,
Village of Tequesta's (Village) Sidewalks permit process, and inspection process;
Rehabilitation and Canstruction Contract and (3) assessed the reliability, accuracy,
(Contract) as a result of a complaint and autharization of work completed and
received on April 11, 2018. Based on the payment thereof. We reviewed the
allegatians, we initiated an audit of the Village's procurement of the Cantract;
Contract, including the procurement to inspection and permitting processes;
payment process, inspection process, and relevant documents, including invoices,
permit process. permits, inspection records,
correspondence, and information relating
The OIG framed the complainant's to the Contract; and related activities and
allegations as follows: transactions.
��1�-:;-��,ti:,r� �. � ;� The Village imprope�ly T!;�� cu���p�arr���t7t� �ss�,��:c� �.=�`
used funds fram the Stormwater Utility ,r���rage officials and staff ar-e
Fund to pay far Public Works projects {,orrr�pt. We dic! rrot find ar��
that were not related to Stormwater ;,,��lcatars o� �a�►�r�r rc�rrr�r�rr�,�
Utility projects and not appra�ed by the ;.:,f��ed ro t1�rs azrc��r.
Village Council;
� I�_:r;,_�ti�_�� r: � R&D Paving, LLC . .
(Contractor) billed the Village for
services not included in the Contract; In relation to the Complainant's concerns,
we found:
i'�, �;::c.a;,i ::�-, �:�i The Contractor
perfarmed work without a permit from �, ��:_� 1ti;,����� �; �� � �����i =;,�� F��_�� �-,:� See
the Village Building Department; and Finding #1 for fu�ther details. The funds
used far the p�oject we�e approved by the
,�;,I,��.a���i�n -� , The Village did not Village Council in the annual budget line
complete required inspections for work items for expendikures. The monies
performed by the Contractor. expended were properly approved and
expended from the praper fund.
Page 1 of 30
QFFICE OF INSPECTOR GESJEFtaL 2019-A-OOQ2
Aileg;�tinr� Alleqaticn (:ii, ��r;: total amount expended for work without a
Ailt-:ra;�ti.�r-� ( 1:� �rc; :;:���nrt�:c See Findings permit prior to the cammencement of the
2 -4 for details. worlc is $122,497.75. The total questioned
cost is $24,753.75.� As a result of aur
Contract/ Invoices discussions with the Village during the
The majority of the expenditures ($3%} for audit, the Village revoked all priar issued
projects the Contractor completed were permits and issued a master permit for the
not clearly defined within the scope of the Contract on September 7, 2018.
Contract.
At the time of the audit, the Village had not
As a result, we identified �368,171.50 as collected $4,909.15 in permit fees that
questioned costs' and $3,803.88 as should have been collected, which is
identified costs.z considered an identified cost. The amount
not collected was recouped by the Village
Additionally, if the Village negotiates a during the audit. We characterize the
lower rate for the removal of asphalt that is Village's collection of past due permits
less expensive than the rate of removal of fees based on the audit discussions as
concrete, then the Village could potentially corrective action. We reviewed the
save future costs. correcti�e action, and it was miscalculated
causing $108.71 of permit fees not to be
The complainant also asserted that the billed or collected, which is considered an
Contractor billed the Village for more identified cost.
square footage of concrete, in depth, than
it remo�ed and replaced. We re�iewed Insaections
various projects fvr the depth of the The Village's Building Official had not
concrete and found that the concrete conducted final inspections for nine (9) of
depth complied with the Contract 12 projects (75%) prio� to �inal payment.
requirements. Additionally, the Village paid the
Contractor for one project prior to the final
Permits inspection. The total amount of work paid
The Village did nat issue permits for six (6) for without a final inspection prior to
of 12 projects (50°/a) under the Contract payment �s $32o,669.75. As a result, we
p�ior to the commencement of work. The the total questioned cost is $27,490.50.''
' QuEstioned costs are cosEs or financial obligations that are questioned by the OIG because of an alleged violatifln of
a provision of a la�ro. regulation, contracc, grant,cooperative agreement, ather agreement, p�oGcies and procedures, or
doCument governing the expenditur� of funds; a finding that, at the time of the QIG �c[ivity, suGh cost or financial
obligation is not supported by adequate documentation: or, a finding that the expenditure of Funds far the intended
purpose is unnecessary ar unreasona6le.As such, not all questi�ned casts are inciicati�e of potential fraud ar vraste.
� Identified costs are costs that have been identified as dollars that have the potential of being returned to the entity to
offset the taxpayers'burden_
'The total of$97,744 was already accounted for with S80,120.D0 in Finding 2 Contract i Invoices, and$17,624.00 in
Finding 6;therefore,it is not included in this Finding to a�nid dupli�ation c�f qu�stioned c�sts.
= The totai af$293,179.25 was already yuestic�ried with S250,801.50 m Finding 2 Contract; Invoices, $24,753.75 in
Findinc� 3 Permits, and$17,574.�c) in Finding 6 Purchase Orders; therefore. +t is not included in this Finding to avoid
duplication of questioned cosEs.
Page 2 of 30
Or=��cE t�� Ird���cr�� G�NEK,�,� 201�-A-0042
Prompt Pavment Act Violation • �
The Village did not pay invoices for
construction services within 20 business Our report contains eight (8} findings and
days after the invoice was received, as offers twenty-one (21} recommendations.
required by the Florida Prompt Payment Implementation of the recommendations
Act. The Village paic! four (4) Qf 21 will {1) assist the Village in strengthening
construction service in�oices (19%} within intemal controls, (2) potentially save $322
31-34 business days of receipt. This in future avoidable costs, and (3) facilitate
caused potential interest charges of $161 compliance with the Contract, Village
to accrue, which is conside�ed a policies, internal processes, and statutory
questioned cost because the Contractor requirements.
may be owed payment_
The Village is taking corrective actions to
If the Village pays future in�oices in implement the �ecommendations.
accordance with the Prompt Payment Act,
the Village can avoid $322� in future We have included the Village's
interest payments, which are considered management response as Attachment 1
avoidable casts.6
Purchase Order
The Village's Resolution 29-17,
Purchasing Policy requires purchase
orders be issued for all contract
expenditures. The Village did not issue
purchase orders for 10 of 21 invoices
(47.6%} totaling $36,570.63, which
resulted in $23,842.757 in questioned
costs.
Our audit identified $444,419.50 in
questianed costs, $8,821.74 in identified
costs, and $322 in avoidable costs.
�,���'�rrP� tt,� �ia'-�: - . � :� _ , ������ �.. � . _
�r�uirements ir� admirristenng the 5r�ewalk Rehabilrtation a���_r
:'�nstruction services eontract, the Villag� di�d properly follow �[s
,�rc�curernent process in solicitrng the Gontra�:r.
`� $161 mtefest amount " 2 years = $322 future avoidabie costs Th�s is oased o� the current construckion service
in�oices paid late.The calculatian is based orj the 2 years remaining on the contract.
^Avoidabte costs a�e costs an entity will nof have to incur,lost funds,andlor an anticipated increase in revenue following
the issuance of an OIG repon.
'The total of$12,727.88 was already accounted for in Finding 2 Gontract?Invoices;therefore,it is not included in this
Fmding to avoid duplicat�on of questioned costs.
Page 3 of 30
(�FFICE OF INSPECT�R GENERAL 201�-A-0042
� i
The Village was incorporated on June 4, 1957, pursuant to Special Act
57-1915, Laws of Florida. The Village adopted a Council-Manager form
of govemment and has five (5) council members that serve two-year
:' terms. Each year during the Reorganization Meeting following the
_ '-�:
- annual election, the Council appoints one of its membe�s to serve as
Mayor and another member to serr�e as Vice-Mayor. The Mayor and
Vice-Mayor serve at the pleasure of the Council for one (1) year andlor
until a successor is appointed and qualified. The Village Council
appoints the Village Manager, who is responsible for managing all public business and
the administration af the Village. The Village provides a full range of services, including
police and fire protection, building inspections, licenses and permits, the construction and
maintenance of streets and othe� infrastructure, recreational and cultural acti�ities, water
services, storm wate� operations, and contracts for residential refuse and recycling
services.
The Village is located in Northern Palm Beach County, Florida and is approximately two
(2) square miles. The Village had approximately 5,731 residents in FY 2017.
The OIG FY 2018 Annual Audit Plan had multiple entities selected for audit of contracts,
as part of the global category. Subsequent to releasing the Audit Plan, the OIG received
a complaint regarding the Sidewalk and Rehabilitation Contract. We selected the Contract
for audit as a result of the complaint. For additional information and dates regarding the
initiation of this audit, refer to Exhibit 2 — Timeline.
Pege 4 of 30
OFFICE OF INSPECTCJR GENERAL 2019-�L-0002
� : • � � • � • �
The overall objectives of the audit we�e to:
� Address the camplainanYs allegations;
• Determine whether controls were adequate related to the contract procurement t4
payment process, permi# p�ocess, and inspection process; and
• Assess the reliability, accuracy, and authorization for work campleted and related
payments.
The initial scope af the audit included reviewing procurement of the Contract and
inspection p�ocess; relevant documents, including invoiees, permits, inspection records,
correspondence, and informativn relevant tv the Contract; and activities and transaetions.
We revised the scope of the audit to include the permit process because the Village's
inspection process is an integral part of its permit process; as such, the inspection process
could not be properly reviewed without fully understanding the permitting process. Based
on the documentation the Village provided for payment for work compl�ted, we expanded
the scope to include review of aIl funding sources used to pay for worlc completed under
the Contract.
The audit methodology included:
• Performing a data reliability and integrity assessment of the related computer
system;
• Reviewing policies, procedures, and �elated requirements;
• Reviewing the Contract and related documentation;
• Perfarming process walk-throughs;
• Interviewing apprapriate personnel; and
• Performing detailed testing on selected transactions and invaices.
As part of the audit, we completed a data reliability assessment for the computer system
used by the Village far the permit, inspection, and payments completed under the
Contract. We determined that the computer-processed data contained in the computer
system was sufficiently reliable fo�the purposes of the audit.
This audit was conducted in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to pro�ide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusio�s based on ou�audit objectives.
Page 5 of 30
C)FFICE OF INSPECTO�i GENEK,4L 2019-A-OQ�2
• � � - • � • f
Allegation (1): The Village used funds from the Stormwater Utility Fund ta pay for Public
Works projects that were not related to Stormwater Utility projects and not approved by
the Village Council. The allegation is not s�u�portecl.
Findirig (1): Fur�cis were properly appraved and exper�ded fro€n th� pro�er funcis.
Village Resolution 29-17 provides that purchase requisitians may not be approved for any
purchases that would resu�t in spending in excess of amounts authorized in the annual
budget. Village Council approved funds in the FY 2018 Annual Budget Report in adequate
amounts to cover for the expenditures listed in the chart below. The annual budget was
praperly approved. Purchase requisitions completed were issued in compliance with
Resolution 29-17.
The Contractor completed one project that was fully funded fram the Stormwater Utility
Fund in the total amount of$78,190.00 (Invoices 201707, 201802, and 2018Q3� and one
project that was partially funded from the Stormwater U#ility Fund and partially from the
Water Fund (Invoice 201704).
Invoice Invoice Description Invoice I Fund Name
Date Amount �
12/01?2017 201704 November 2Q17 Miscellaneous $5,711.00 Stormwater Utility$2,855.50/
Sidewalk Repairs for Water , Water Fund $2,855.50
Distributian �
01/09J2018 201707 Demo and Replacement of $28,542.50 Stormwater Utility
Driveways on Teyuesta Drive
01/22/2018 201802 January 2018 Demo and $42.227.50 Stormwater Uti[ity
Replacement on Tequesta Drive �
01l3012018 201803 Demo and Replacement of i $7,420.00 Stormwater Utility
Driveways on Tequesta Drive
The replacement of driveways in the Tequesta Drive project (tatal amount $78,190.00)
included the replacement of asphalt driveway approach aprans with concrete to meet the
grade of the new concrete sidewalk and ADA requirements. The driveway appraach
aprons are in the Village's Right af Way and considered part of the swale. The Stormwater
department, not the Public Works Department, is responsible for the maintenance of the
swales and driveway approach aprons. Therefore, the project was prope�ly expended
from the Stormwater Utility Fund.
The sidewalk repairs for the Water District project (total amount $5,711.00} included
repairs related to water line breaks, �re hydrant concrete, and stormwater manhole
concrete repairs. These sidewalk repairs were also properly expended through the Water
Fund and Stormwater Utility Fund.
Page 6 vf 30
�FFVCE OF INSPECTO� GEhdEFt,4� 201�-A-0042
The two projects included repairs of items which are the responsibility of the Stvrmwater
and Water department. The expenditures were prope�ly classified as expenditures under
the Stormwater Utility Fund and Water Fund.
Recommendatior�:
None
Manac�ement RPs�onse Summ�ry
__- - ___
_ __ __ _ __ __ _ _ __
Village management reiterates the finding of compliance, asserts its good faith
work on this sidewalk rehabilitation project, and appreciates that this good faith
work and compliance is recognized by the Office of Inspector General.
Allegation (2): R&D Paving, LLC (Contractor) billed the Village far services not included
in the Contract. The allegation is supported.
Finding (2): The Village paid Contractor for services that were nat clearly d�fined
within the scope of the Cantrac4.
The Village issued Request for Proposal #PW 03-07 for Sidewalk Rehabilitation and
Construction (RFP). RFP Section 3.0 (Proposal Submission Form and Content)
encouraged proposers to complete the form proposal attached to the RFP as 5chedule
A.
The Contractor responded to the RFP by offering to perform the senrices requested in the
RFP at the prices provided in Contractor's Bid Form Schedule A. The Village selected
Contractor to perform the work, and on or about October 12, 2017, the Village and
Contractor executed a three (3) - year Contract, with an option to renew for two (2} years.
The Contractor agreed to provide sidewalk rehabilitation and construction services for
�arious sidewalks located throughout the Village, on an as-needed basis, as described in
the Villages RFP. The Village's RFP and the Bid Form Schedule A with Contracto�'s
pricing were incarporated into the Contract, as Exhibits A and B, respectively.
The Complainant's major concern was that the Contract did not include pricing for
removal of asphalt and replacernent with concrete. We noted the following issues (see
Exhibit 1 for a defailed breakdawn af exceptions}:
The Village paid 14 of 21 invoices (66.7%} billed for services or items that were not
clearly defined in the scape af the Contract or were outside the scope of the Contract.
These invoices totaled $371,975.38, which is 83°/fl of the total amount paid to the
Contractor for work the Village considered as Contract services.
• Improper refund to Contractor: $3,803.8$was for permit fees that were reimbursed
to the Contractor by the Village in error.
Page 7 of 30
OFF�cE o�= IrdsN�cro�: G����r�.4� 2019-A-0002
• Invoices for services outside the scope of the Contract: $6.994 was fo� payments
to the Contractor for�emoval of pave�s and replacement with concrete, stucco wall
repair, crack repair, and MOT.°
• Invoices far services not clearly defined in the scope of the Contract: $361,177.50
was for remQval of asphalt or pavers and replacement of concrete_
The complainant also asserted that the Contractor billed the Village for services at rates
higher than the rates set forth in the Contract. Specifically, the complainant asserted that
the Contractor billed the Village for more square faotage of concrete, in depth, than it
removed and replaced. Accordingly, we reviewed various projects for the depth of the
cancrete. We found that the c4ncrete depth complied with the Contract requirements.
Many of the issues we found relating to the Village's performance under the Contract can
be attributed to Village staff not sufficiently reviewing the Contract requirements prior to
requesting, appro�ing, and authorizing payment to the Contractor for work.
The contract amounts questioned and identified based on the Village paying Contractor
for services that were not clearly defined within the scope of the Contract, were imprope�ly
refunded, or were outside the scope of the Contract are summarized in the chart below:
Costs Amvunt9 Exception°�of
tatal amount spent
Questioned costs $ 368,171.50 82.2%
Identified costs 3 3,803.88 0.8%
Total Questioned and Identified costs S 371,975.38 83°k
Total Amount spent under Contract a 448,062.38
The majority of the expenditures (83% of the total expenditures} for projects compl�ted
were not aligned with the Contract requirements. The risk of o�er payment is increased
when Contractor invoices are not reviewed fo�compliance with contract requirements.
Additionally, if the Village negotiates a lower rate for the removal of asphalt that is less
expensive than the rate of removal of concrete then the Village could potentially save
future casts.
R�corl�rnendataons:
(1} The Village amend or rebid the Contract to include construction services,
such as, asphalt remo�al with replacement of concrete, paver removal with
replacement of concrete, demolition, or stucco repair. Additionally, the
Village could consider piggybacking its contract off another entity that
contains the services.
�MOT was not defined ar explained on che in�oice.
`�A portion of the invoices had multiple violations and were only counted once to avoid duplication in the questioned or
identified cost totals.
Pege 8 af 30
OFFICE OF INs��CTOk GEVEK,4L 2019-A-0002
(2} The Village recoup $3,803.88 in permit fees reimbursed to the Contracto�
in eITor.
(3} The Village enhance its review process for monitoring contract
performance and invoicing against contract terms.
(4) The Village provide additional training to staff on Cont�act requirements.
Management Response Suir�mary
- -- -------- —
(1} The Village will amend the contract.
(2) The Village has recouped the permit fees.
(3) The Village has already created an administrative policy for handling pre-
construction contract processes.
(4) The Village will continue to train staff regarding the administrative policy
for handling pre-construction contract processes.
Allegation (3): The Contractor performed work without a pe�mit from the Village Building
Department. The allegation is sup�orted.
F�nding (3): Thc Villagc ciid not issue permits prior to the commencement of work
for six (Fi) of 12 projects (50';�'�,y ur�der the Contract.
Section 105.1 of the Village's Buildings and Building Regulations Ordinance, Municipal
Code section 14-32 (Ordinance 5-12, § 1, 5-10-2012; Ordinance 4-14, § 2, 2-13-2014;
Ordinance 17-15, § 1, 9-10-2015) states,
Any contractor, owner, or agent authorized in accordance with Chapter 489, F.S.
who intends ta construct, enlarge, alter, repair, move, demolish, or change the
occupancy of a building or structure, or to erect, install, enla�ge, alter, repair,
remove, conve�t o� replace any impact-resistant coverings, electrieal, gas,
mechanical, plumbing or fire protection system, or accessible or flood resistant site
element, the installation of which is regulated by this code, or to cause any such
work to be done, shall first make application to the building official and obtain the
required permit.
The Village's Code of Ordinances, Appendix C, further clarifies that a permit is required
for driveways and sidewalks.
Additionally, Section 6.0 Scope of Services of the RPF incorporated into the Contract
stated that the requested services would include the construction andlor deconstruction
of residential sidewalks and driveways and that one (1) permit from the Building
Department Office would be required to perform the wo�k. The permit would be filed at
the Contractor's expense and would cover the entire sidewalk replacement program.
Page 9 of 30
OFFICE aF INSPtCTO�i f'uENERAL 2019-A-0002
The Con#ractor did not obtain one permit for the entire sidewalk replacement program as
of the date the audit was initiated. Instead, the Village issued multiple pe�mits far certain
indi�idual projects under the Contract. Unde�this process, six {6) of the 12 Contracto�'s
projects (50%) did not have a permit for the work when the work commenced.
As a result of our audit discussions, the Village stated it revoked all permits issued to
indi�idual projects under the Contract and issued a master permit for the entire Contract
on September 7, 2018, as a corrective action. The balance of permit fees collected under
the revoked permits was applied to the new master permit, and the diffe�ence was paid
by the Contractor.
We re-calculated the master permit fee that should have been billed and callected using
the total amount paid to the Contractor to date less the amount reimbursed to the
Contractor for permit fees.'o
Master Permit Fee Calculation"
-- ------__------
, Appendix C j Fee Base Total —'
Ordinance Amourrt '
A lication fee $75.00 1 S 75.00 '
Master permit fee . 2°Ao S444,25&50 . � 8,885.17 �
Permit fee base $ 8,9fi0.17 ',
Florida Statutes
DBPR surchar e fee 1% 8,960_17 $ 89.60
BCA surchar e fee 1.54fo 8,960.17 $ 134.40 '
Total permit fee that
should ha�e b�en
collected $ 9,184.17
Prior to the corrective action and additional permit fee collections, the Village had not
collected $4,909.15 in permit fees that should have been collected. This occurred
because not all projects had permits at the time the work was completed. This is an
,r'The parmit fees that were reimbursed by the Viilage in the amount of S3,$03,88 are included in Finding 2. Since the
recommendation is to recoup ihe funds,we tett the amount in the recalculation to show the actual amount charged and
separaEely addressed the reimbursement that was m error.
"The Village's Buildings and Building Regulations Ordinance, Municipai Code section 1d-32(Ordinar�ce 5-12,§1. 5-
10-2q12; Qrdinance 4-14, § 2, 2-13-2Q14; Qrdmance 17-15; § 1, 8-1Q-2�15) states that on buildmgs, structures,
electrical,gas,mechanical,and plumbing systems or alterations requiring a permit,a fee for each permit sha9l be paid
as required,in accordance with the�illage's�omprehensive(ee schedule as set farth by resolut,on of the village eouncil.
The Code of QrdinancQ,Appendix C requires a$75 non-refundable application tee that is added to the permit fee and
that master permi[fe�s shall be two percent of the valuation unless a fixed fee is listed (there was no fixed fee listed).
The valuaGan shall be considered the greater denommation of either the notarized contract (there was no value
attached to the contract}or the valuation determined by the Intemational Build+ng Code Section 109,3, The valuation
in this Gontract was based un the value of the work compleled by the Contraetor,as suhmitted in the invoices.
Section 533 721,Florida 5ta[utes,Surcharge.states the Departmeni of Business and Professional Regulations f DBPR i
reyuires a sureharge assesseci at the rate of one percent nf the permit fees �ssociated with the enforcement of the
Flonda Building Code (FBC) and at a minimum $2.U0 be charged on any permit issued, Section 4fi8.6�1, Florida
Statutes, Building Gode Administrators(BCA)and Inspectors Fund, requires a surcharge of one and one half percent
of all permit fees assaciated with the enforcemeni of the�FBC and at a minimum$2.00 be charged on any permit issued.
Page 10 nf 30
OFF�LE oF Ir�s�ECra� G�r�E�aL 201�-A-0002
identified cost that has been recouped by the Village. The master permit fee calculated
by the Village staff in the amount of$9,075.46 has been paid by the Contracto�.
Permit fee Amount
What should have been aid $ 9,184.17
Actual a ments $ 9.075.46
Difference owed by the Contractar � _ 108.71 j
The difference between what should have been billed and collected and the actual
amount is considered identified cost since this cost can be collected by the Village and is
in violation of the Ordinance and Contract. The additional identified cost for permit fees
(underpayments} is $108.71.
The total amount of Cantractor invoices paid for work that was not properly permitted prio�
to work commencement totaled $122,497.75, which is 28% of the total amount paid for
work performed under the Contract. The wark commencing prior to a permit being issued
is considered a questioned cost because it is in violation of the Ordinance and the
Contract.
Questioned Costs(QC} Amount �
Total Unpermitted Work $122,497.75 ',
Aeeounted QC TotaN in $97.744.00
Finding 2 and Finding 6 '
Unaccounted QC Tatal $24,753.75 '.
�
This increases the risk that inspections are not obtained as required and that work
completed may not be in complia�nce with the Flo�ida Buifding Code(FBC}and Ordinance.
Proper permitting has been resolved in the corrective action; however, the proper permit
fees have not been paid due ta the calculation errors. This increases the risk that required
payments for surcharges may not be praperly paid to the State of Florida.
R�corrimendatians:
_ _ __ ___ _ _ ___ __ _ _ __
(5) The Village collect the balance of the permit fees that are still owed by the
Contractor in the amount of$108.71.
(6� The Village review the surcha�ge amounts paid to the State of Florida and
provide additional payment to the State of Flo�ida for any surcha�ges owed,
after additional permit fees are collected.
(7) The Village update policies and procedures to provide additional guidance
to staff and to ensure the proper project valuation is used when calculating
and billing permit fees,
(8) The Village create and implement a system of tracking and monitoring for
the future projects and permit fees that will be owed by the Contractor
under the master permit.
Page 11 of 30
OFFICE Q� INS�ECTO� GEtVERAL 2019-A-OOQ2
(9) Village staff completing work should develop and implement a �eview
process to ensure that all projects ha�e proper permits prior to the
commencement of work.
Manager�ient R�Sponse S�fr��r�i�ry
(5) The Village has collected the balance of the permit fees.
(6) The Village has �erified the surcharge amounts as being properly
submitted to the State of Florida.
(7) In conjunction with the newly created administrative policy, the Village will
continue to train staff to ensure proper valuation occurs.
(8) In conjunction with the newly created administrati�e policy, the Village will
continue to train staff to ensure proper tracking and monitaring occurs.
(9) The Village has already created an administrative policy for handling pre-
construction cont�act p�ocesses requi�ing Village const�uction project
"kick-off' meetings with appropriate staff in order to review the project and
ensure that all projects have proper permits prior to the commencement of
work.
Allegation (4): The Village did not properly complete inspections for work perfvrmed by
the Contractor. The allegation is supported.
Finding (�): The Village's Building Official did not conduct a final inspection for
75% of projects and did not conduct a final inspection for one project priar to final
paymcr�t.
Section 6.0 Scope of Services of the RPF stated that
' the requested sen+ices would include the construction
� and/or decanstruction of residential sidewalks and
� driveways and that one (1) permit from the Building
' ���_
��..�!=. :-'=:� :.,_ Department Office would be required to perform the
,,r.- , � .
�` ::�:;f work. According to Section 110.3.10 of the Village`s
=`' F '"` Buildings and Building Regulations 4�dinance,
�-. :_ .�,,.
.��,�=�''
�� '-' � Municipal Code section 14-32 (Ordinance 5-12, § 1, 5-
� 1 Q-2012; Ordinance 4-14, § 2, 2-13-2014; Ordinance
17-15, § 1, 9-10-2015), projects requiring a permit must
be inspected upan completion, prior to the issuance of
the Certificate of Occupancy or Ce�tificate of Completion. The Buildings and Building
Regulations OrdinanGe provides,
building o�cial shall inspect or cause to be inspected, at variau� intervals, all
construction or work for which a permit is required, and a final inspection shall be
Page 12 of 30
oFF�cE o� �ras�Ecrak ����r�a� 2�019-A-ooa2
made._.upon completion, prior to the issuance of the Certificate of �ccupancy or
Ce�tificate of Completion.
We found that the Building Official has not performed final inspections on nine (9) of the
12 prajects (75%) that the Village characterized as completed and for which the Finance
Department issued final payment_ Because the inspections have nat been completed, the
Certificate of Qccupancy or Certificate of Completion cannot be issued for those projects.
The Viflage made final payment on each af these projects without setting aside retainage
o� inspecting ihe projects tv verify that the projects were actually completed to
specifications.
The Building Qfficial cvmpleted inspections for the other three prajects we re�iewed;
howe�e�, one of the three did not receive a final inspection until after the finat payment
was made to the Contractor. The Village expended a total of $320,669.75 for the 10
p�ojects that were �ot properly inspected. This resulted in $27,490.50'� in questioned
costs.
The process that Village staff uses to review and approve invoices for payment does not
include input from the Building Official responsible for inspections. According to
Resolution 29-17, it is the end-user department's responsibility to ensure the proper
receipt of ordered goods or services and verify receipt of ordered purchases agree with
the purchase order prior to approving the invoice. Additionally, the Finance Department,
which reviews purchase requisitions for compliance with purchasing policies and pays
invoices as the final step in the in�oice approval pr�cess, does not re�iew the invoices for
proper final inspection from the Building Official.
The Building Official has not completed permit inspections for 75% of the projects
completed under the Contract, even though final payment has occurred for these projects.
Additionally, one project had the final inspection after the �nal payment. Therefore, final
inspections were not completed prior to final payments. By not requiring final inspections
prior to the final payment, the risk is increased that work campleted may not be in
compliance with the FBC, the Contract, and Village's Buildings and Building Regulations
Ordinance.
Recammenciations:
(10) The Village should include the final permit inspection as part of the in�oice
review and approval process.
(11 j The Village should include review of contract requirements as part of the
invoice review and approval process.
(12) Inspections should be completed with a certificate of completion issued
prior to final payment.
�13j The Contract should be amended to require the final inspection prior to
final payment for work completed.
Page 13 of 30
QFFIL'E C7F INSPECTC7R GE�dERP,L 201g-A-pQ42
Manager�tent Respar�se Surrtraiary
(10� The Village has already created an administrative policy for handling
construction contract processes to implement this recommendation.
(11) The Village has already created an administrati�e policy for handling
construction contract processes to implement this recommendation.
(12) The Village has already created an administrative policy for handling
construction contract processes to implement this recommendation.
(13) The Village will amend the cantract.
. s . . •
Finding (5): The Village did not pay invoices for canstruction services within the
tirne prescribed hy the Florida Prompt Payment Act.
Section 21$.735{1)(b}, Florida Statutes (Prompt Payment Act) states,
If an agent need not approve the payment request or invoice which is submitted
by the contractor, payment is due 20 business days after the date on which the
payment request or invoice is stamped as received as provided in s. 218.74(1).
The Village does not require that a Village agent appro�e the payment request or in�oice
prior to an invoice being submitted for payment. Thus, payment is due 20 business days
after the date on which the payment request or invoice is stamped as received as provided
in s. 218.735(1)(b}, unless the Village rejects the pay request in writing and specify the
deficiency and the action necessary to make the payment request or invoice proper.
Section 218.735(9}, Florida Statutes, provides that all payments due under the section
a�d nat made within the time periods specified "bear interest at the rate of 1 percent per
month." The interest is potentially due to the Contractor.
We found that four (4) out of 21 invoices (19%) were not processed and paid in
accordance with the requirements in the Prompt Payment Act.1z
Four(4) invoices were paid 31 to 34 business days after the date of receipt. Although the
Contractor has not sought interest from the Village under the Prompt Paymen# Act, the
Contractar may seek payment, resulting in unnecessary increases in the taxpaye�s'
burden.
This potential violation may have accurred because the Village has not implemented a
process for stamping invoices as received as provided in section 218.74(1) and because
" The invoices were not date stamped with the date that the in�oice was received ancl did not have an invoice date;
therefore.the invo+ce date 1 received date used was the da4�the invoices were emailed to the ViAage.
Page 14 of 30
OFFICE OF INSPECTDF; GE"dERAL 2019-,A-OC172
the Village's Purchasing Policy(Resolution 29-17) pro�ides that the Village's standard for
payment of invoices is 30 days from invoice date. Even if the Village relied upon this
standard, the Village did not meet it when the Village paid four of the 21 invoices 31 to 34
business days after the date the invoices were received.
Interest Char es
Invoice ' Inv�aice #Days Daily Interest Total Potential
�� Amount o�er 20 Rate73 Interest
- --�--
2�1811 $16,445.00 14 0.000333333 $ 77
201812 $11,045_50 14 0.000333333 $ 52
201813 $ 1,930.00 14 0.000333333 $ 9
2Q1816 $ 6,218.75 11 O.Oa0333333 $ 23
Total Questioned Cost $ 161
The interest charge of$161 is considered a questioned cost because these are eosts that
may be owed to the Cont�actor, This amount can be avoided in the future, if the invoices
are processed timely in accordance with the Prompt Payment Act requirements for
construction services_ The avoidable cost is the$161 interest charge multiplied by 2 years
equals $322.
Recommendations:
(14) The Village update its Purchasing Policy to comply with the Prompt
Payment Act requirements for payment of canstruction services.
(15) The Village implement a p�ocess for date stamping invoices when received
and pay or reject the construction service invoices within the timelines, as
required by the Prompt Payrnent Act.
(16) The Village pay the Contractor the $161 calculated for the interest charge.
Mar�agerr�ent Re�por�se Surr�r���ry
(14) The Village will update its purchasing policy to implement the
recommendation.
(15) The Village has already created an administrative pvlicy for handling
construction contract processes to implement this recommendation.
(16) The Village will pay the contractor the calculated interest.
13 The dady interest rate calculation is 1°ro;30 days=0.000333333 daily interest.
Page 15 of 30
�FFICE QF INSPEC TOR .�'.aENERAL 2�1�-A-0402
Finding �fi): The Village paid in�oices without issuing a purcha$e arder, as required
by the Village'� Purchasing Ralicy.
The Village's performance of the Contract is governed by the Viltage's Resolution 29-17,
Purchasing Policy, revised July 2017. The Purchasing Policy states,
. All contracts and progress payments will
���Y be entered through the purchasing system
�oQ' -- - � as a purchase order so that the entire
G�Pg contract amount for the fiscal year is
Qv�; encumbered in the accounting system
P� immediately.
The Village paid 10 of 21 invaices from the Contractor (47.6%) totaling $36,570.63
although the Village had not entered those projects performed under the Contract into the
computer system as a purchase order, as required by Resolution 29-17. This resulted in
an additional $23,842.75 of questioned costs.'
We noted that in those cases where the Village did issue purchase orde�s as required by
the Purchasing Palicy, they were all approved by the Village Council or appropriate party,
the Village's purchase order information was cansistent with the Contractor's invoice, and
the invoiced rates were consistent with the Contract's pricing.
Many of the issues we found relating to the Village's performance under the CQntract can
be attributed to Village staff not sufficiently reviewing the Contract and the Purchasing
Policy requirements prior to requesting, app�oving, and authorizing payment to the
Contracto� for wark. In response to our determination that the Village was not complying
with the Purchasing Policy, the Village staff responded that they are not required to issue
purchase orders for projects under $10,000 under Resolution 29-17; however, the
Resolution requires that all contracts be issued a purchase order so that the entire
contract amount for the fiscal year is encumbered in the accounting system immediately.
The risk of over payment or payment exceeding the Village's budgeted and encumbered
amount is inc�eased when Contractor invoices are not reviewed for compliance with
governing policies.
RecorY��n�et�ciati�n�
(17� The Village comply with the Resolution 29-17 Purchasing Policy
requirements.
(18) The Village provide additional training to staff on Resolution 29-17
Purchasing Policy requirements.
M�r��c�erriPnt �2es{�Qrise S��rr�ni,�i'y.
_ __ .__ _.._ __ _ _ _ __ ___ _ _ _
(17) The Village will amend its purchasing policy.
Page 16 of 30
flFFict o�= Ir�s�E�ro�; GErat�,�� 2019-A-0002
(18� The Village will continue to train staff �egarding its purchasing policy.
Finding �7}: Written r�q�air�rnents are inct�nsistent.
The Village has multiple documents used as written guidance related to its payment,
permitting, and inspection processes which include:
1. Permits and Inspections
a. Florida Building Code (FBC), 6'h Edition 2�17
b. Building and Building Regulations Ordinance, Chapter 14
2. Permit Fees
a. Florida Statutes, Permit Fee Surcharges
b_ FBC, 6th Edition 2Q17
c. Building and guilding Regulations Ordinance, Chapter 14
d. Resolution 14-18, 6uilding Department Fee Schedule
3. Payments
a. Florida Statutes, Prompt Payment Act
b. Resotution 29-17, Purchasing Policy and Procedures
1Ne noted the following inconsistencies:
Permits and Insuections
We found the Buildings and Building Regulations Ordinance, Municipal Code section 14-
32 (Ordinance 5-12, § 1, 5-10-2012; Ordinance 4-14, § 2, 2-13-2014; Ordinance 17-15,
§ 1, 9-1 Q-2015) conflicts with the Village's Code of Ordinances, Appendix C, (Res. No.
67-05/06, § 1, 4-13-2006; Res. No. 17-1 Q, § 1, 6-10-2010; Res. No. 19-15, §§ 1�Exh. A},
2, 6-11-2015; Ord, Na. 8-17, § 2, 7-13-2017)and Resolution 14-18 for the time extension
allowed. Section 14-32 allows for an extension of 180 days versus the Appendix C and
Resolution that allows an extension of only 90 days.
Permit Fees
• The Village's Code of �rdinances, Appendix C, (Res. No. 67-05/0fi, § 1, 4-13-
2006; Res. No. 17-10, § 1, 6-10-2010; Res. No, 19-15, §§ 1(Exh. A), 2, 6-11-2015;
Ord. No. 8-17, § 2, ?-13-2017) and Sectian 553.721, Florida Statutes, are
inconsistent with different fee percentages and minimum amounts related to permit
fee surcharges for the aepartment of Business and Prafessional regulatian.
Resolutivn 14-1$ does not incorporate Section 553.721, Florida Statutes.
• The Village's Code of Ordinances, Appendix C, (Res. No. 67-05l06, § 1, 4-13-
2006; Res. No. 17-10, § 1, 6-10-2010; Res. Na. 19-15, §§ 1(Exh. A), 2, 6-11-2015;
Ord. No. 8-17, § 2, 7-13-2017) does not incorporate Section 468.631, Florida
Statute, related to the permit fee surcharge for the Building Code Administrators
and Inspectors Fund.
• FBC (also, Intemational Building Code}, Ordinance, Appendix C and Resalution
14-18 contain inconsistent definitions of the term "Valuation".
• The Village's Cade of Ordinances, Appendix C, (Res. No. 67-05/06, § 1, 4-13-
20Q6; Res. No. 17-10, § 1, 6-10-2010; Res. No. 19-15, §§ 1(Exh. A), 2, 6-11-2015;
Ord_ No. 8-17, § 2, 7-13-2Q17) contradicts itself related to the"after the faet" permit
Page 17 of 30
0�=���� oF INs�tcra�: �E*��k,�� 2019-A-0002
fees that may be applicable in emergency work if the permit application is not
submitted appropriately.
Invoice and Pavrnent
Resolution 29-17 is inconsistent with the Prompt Payment Act requirement for
construction ser�ices invoices payment. The Prompt Payment Act states that"if an agent
must approve the payment request or invoice prior to the payment request or in�oice
being submitted to the Iocal gavemment entity, payment is due 25 business days after
the date on which the payment request or in�oice is stamped as received" and if there is
no need for an agent to approve the payment request, then the payment is due within 20
business days. Resolution 29-17 does not specifically define a due date for construction
senrices invoices, but the standard for payment of�endar in�oices is within thirty days of
the invoice date �see report Findrng 5 for more detail about interest charges).
Regular review of the written guidance may have revealed inconsistencies between the
Ordinance and FBC requirements as well as between Resolution 29-17 and the Prompt
Payment Act.
Operations are mare prvne to error when there are inconsistencies in the written
guidance. This potentially decreases the efficiency of the process, as well as, increases
the risk of errors including improper billing, nan-compliance, and penalties,
Recommendations:
(19} The Village update written guidance related to permits, permit fees, and
invoice payments to be consistent th�oughout all written documentation
and follow the Florida Statutes.
(20) Staff should be provided additional training an the revised written
guidance.
Managernent Respanse Sumrtiary
(19) The Village will update the written guidance.
(20) The Village will continue to train staff regarding its permits, permit fees,
and invoice payment guidance documents.
F�r�dir�c� (8�� The prc�cesses related ta inspectian� could t�� ent»r�c�ci.
The majority of the Village's processes were adequate with proper controls in place. We
noted an area in the inspection process that could be enhanced. Inspection dates for
campletion pf inspectians were not entered into the computer system within a reasonable
time period. There was no supporting documentation to show when the inspection
occurred because the Village uses an eiectroniclpaperless method and enters the
information directly into the computer system. Entries reviewed that were related to this
Contract had 5-6 month entry delays from when the actual inspection was stated to have
occurred.
Page 18 of 3�
QFFICE OF INSPECTOR �ENERAL 2019-�1-[�002
Delayed entry of inspection information into the compute�system may affect the accuracy
of the entry, decrease the �eliability of the information, and delay the close out of the
permit. When permit inspections are not campleted prior to final payment, there is an
increased risk that the work may not meet standards and if payment has been fully
provided, it may be difficult for the Village to recoup the fees or obtain corrective actions
from the Contractor_
Recommendation.
(21) The Village enter permit inspections into the computer system at the time
of occurrence or document the inspection manually outside of the system
{until they are able to be entered into the computer system with the
documentation �etained) to ensure the accuracy of the inspection dates.
M�nagement Response Summ�ry.
(21 j The Village will update its practices and policies.
Page 19 of 30
QFFICE QF INSPECTOf� GENERAL 2019-A-OOQ2
• • � � �
� ■ ■
Questioned Costs
Finding QescNption Questioned Costs
2 Invoice Non-Compliance with Contract � 368,1T1.50
— -- -- -- -- _-- ----- - -- ---- __ _ _-- --- ----
� Ins ections did not ro erl occur S 27,490.50
3 Permits not obtained rior to commencement of work 3 24,753.75
5 Prom t Pa ment Act Interest � 161.00
6 Invoice Non-Campliance with Purchasing Policy __ _ _t 23,842.75
— -- ----
TOTAL QUESTIONED C4STS s444,419.50
Identified Costs
Finding Description Identified Costs
2 Reimbursement of ineligible permit fees $ 3,8U3.88
3 Permit Fees not paid, but recouped $ 4,909.15
3 Permit Fees not paid $ 108.71
TOTAL IDENTIFIED COSTS $ 8,821.74
Avoidable Costs
Finding Description Avoidable Costs
__ _
� Prom t Pa ment Act Interest 322 '
TOTAL AVOIDABLE COSTS $ 322
Page 20 of 30
QFFIL'E QF INSPECTOR GENERAL 201�-A-0002
Attachment 1 —Village of Tequesta's Management Respanse, page 24-3�.
• .
The Inspecto� General's audit staff would like to extend our appreciation tv the Village of
Tequesta management and staff fo�their assistance and support in the completion of this
audit.
Th1s report is avarlable on the O!G websrte at: hffp:f/www.pbcgov,com/O1G. Please
address inquiries r�garding this report fv the Director of Audit by emai� af
rnspector@pbcgov.org or by telephone at(561) 233-2350.
Exhibit 1 —Summary of Testing Exceptions
Exhibit 2 —Timeline
Page 21 0�30
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Page 23 of 3�
OFFICE QF INSPECTOR GENERaL 2O1�-A-OOO2
� A ' •
� � L..��Y Iti�'
�: ��
� f1,��-[7 ��I�, I'.;��.
Keith V1�''. i)a�•is, Esc�.
r ,�::i.�����ri:.„��. .. ., �,�,�� ;,
l;-.•.t-:�,ra�u a,�d!�.a,'{,���...-noir:;r���
1�'�nl t.iilS��,L�ti,.nhl.�:���Liu•.�.:�n
Novembef 13. 2018
Fvfet��an G�iil�rd, I�ir�c;tor o.`Audii
P�Irn Beach Counf�,� Office af InspAciaf�enera�
f-'.C1, tiox 75568
Wesi r'alm 8each, FlrY�da 33d16
R}� Villago of Tequesta Draft A�dit ReFort—hudit ef �idew2lks Reh�bililat�on ar.d
Construciion Coritraet
Dear tv1s. Gaillard:
On behal€of 4'i'�tgE vf��ques;� Ac�in� Manager Jsmes M.V4rein�n�i �nd the Viilaqa
oP feuu�sla F'ublic Y1'orks, Buildiny, Finance. a�id A�riitiistratr�rl �Eµ�irbti�t�ts, pless2
aceept this resRans�to the above rEferenc�;i draf;at;�id r��o�t l�s reauesteci. '.t7�: fallowing
will respand tc the �indi��s and rec�mmer�dations conta�ne�; in sa�d re��rt, �r•d tiv:�! a�fer
Vill�ge m�nagemenc's Gropose�l corrective act ar�.
Tr�ere are �+yh; {gj findinys ir• Ihe �eport, szven {7j cf vvr ch cpntain •ecommenda-
Uc��15, The fir�d�nys �in;7 recornmertidat o�s wo� be a�drzssed here in t��P arcler lhat they are
prF�s�;nied in Ehe l7rafl Audil R�pc�R.
It �s imp�riGr�t to stress that ihis a�tfii tivas t�c;n� ���:: i;' � resicienl _orn;���:��t �i,eging
corr�i;�tian at a: leaeis of Vilf�ye governr7Hr:t, and that the Office oF Inspector GQneral
faund no indicators of public corruption I; is also impor.ant ta stress fhai df��pite the
t�rqinGs co+�ta�nec in :h� �raft aucit rep:,�t, t ie �rdf; a�d�t repc�rt dckrowltdi�e� !ha: the
Village properiy procured this contract, and tn�t `�the majority of the Vitlage's pro-
cesses are adequate with proper controls in piace." n add'tion, d�_ring the ex�t inier-
vi�vl �vth Vil��3<�c 5:��f1 tF�c C�€f�ce of !nspeetcr General, throuc;� Ivlr. Car�y h:mself c7Ck�G'd1^
e;i•�Fd that the fi�dings in the draft a�dit repart arP not outside the reahn of normal ar
typical findings when this type of audit is conducted, and iha+.they are meant to make
a yood pracess eveii better.
'+Vith this in mi�d. the findings and the s?er.rfc r�„c�rrrl�er�tlati_�ns associated with
Eacn fi�dirg meart ta ursprove the Village's o�er���c�ns w�l, bc�addrF�sscd m tur�►, 31or;y �r;itj,
Vi�'�ge•na�agement s �roaose�cor�ect�v� acUon lhereto.
';i f� r�!;i r�rN i�i,;riy n�„ , ,1� !',� !,:r J�. i i � J'1' jv',r,�..,:t• ,.. � ,ni 'iih �i(,_I r. _-----
il�ii.V.iii&�7�'d�:�lf�7(+rt1!'.����1!
.�,F..aiar,+c,t:xr�F.li!ti 1�!()f',1l C;��1�rRv,'IJf^'T 1.V{t';l\�r?FTNT+'��
Page 24 of 30
QFFICE OF INSPECTOR C�ENERAL 2�'I�-A-OOO2
�:i!�!'i!l2k�F�.'?.�v1.�'
:Llrnnl�'�rtnl l��ij�oi�x'1i�•1ar��t of 4tditn�iiA.lti�liitrilrli�liir�i;��i�i ii�r�str�.:ti�r�t G>ettr��,.t
-�r�!��r, ` Resident comFdalnt that the Villaye usecl funds from the Stormwater Ulility Funcf
to pay for Publie V"J'�rks pro�e�cts unrelated to 5tormwater Utility projects ar�d not approved
t�y tt7e Vill�ge Gouncil is unsupported.
This finding verifies that funding for this contract was properly �Ilocated between
stormwater utiliiy dollars, water utility dallars, and general operatkons dollars. In
addition, this finding verifies that Village Council approvals were properly obtained
for all expenditures.
. � � , , , :� � �
Tnere are na recommendat�ans assnciated with this finding. However, Village
management reiterates the ffnding of compHance, asserts its good faith work o� this
sidewalk rahabilitation project, and appreciates that this good faith work and compi'r-
ance is rvcogni=ed by the Office of Inspector General.
- 15 : ; : Resident complaint that the Vill:3ye w.35 r��IlecJ by lh� contraetoe for siuewalk
rehabilitat�on and replacement services that were r�ot �learly tl�ffned fn the contract. or Ihat
were ouEside the scope of[he cantract.
This finding hinges on the ssue of the desc�iption a�the �,voric to be performed, an� specifi-
cally the distinction betweEn perfr�rming �r�ork for removirtg �Id aasphalt sidewalk vs. per�orrn-
ing vrork for removrng old cancrete s�dewalk, In�ddition, thi5 fnding poinls out one job tt�at
this conUactor perF�rmEd ror fihe Village o�� � separate unrelated rnatter that �Nas not
included in the contract, but tnat was mistakenly processe<i a� though �t was.
F�rst. the Viilage b�d this contract �n a manner that"bundles' all work necessary ta o�tain �he
end result of nevr sidewalks thraughout the Village, on an 'as neeced� basis from plac+�-to-
place over a period af years. Bidders �ro�ide�i pricing for"�II inclusive` ►vark Cy the square
f�ot. including removal of existiny sid�walk fwhich sarnetirnes �r�as several inch thick
concrete and sornetrnes vr�s several inch lhick asph�lt}, removal and dispasal of debris,
ground preparai�on, grading, and torming & �ouriny a new sidewalk. Separate prieing w�s
bid and obtained based on whether the fin�l ncw pro��uct was entirely nerry s�dewralk or the
replacement af exisUng; whether th� fir�al new product was to be concrete or �spnalL ar�s�
wheEher tne �Noric being perforr7�ed was sidewalk or driveway apron. The successiul
bidder was, by far, the low bidder in the procurement process, which as noted aba�e
was procured correctly.
Thca rlri(t �aud�t rc;�c�rt I,,t;�a��s '.}�:�E�r�,t 7 i 5G ��s "Uu�stit�ned e�sts" whEeh is the money pa�d to
the cont�aclor under the cantract for work to ren�Uve vlcl asphdlt and instdl) new concrete.
The Village disagrees that these are "questioned costs.'" As �witten, Propasa� A oa the
cantract provi�es pr c�ng for :�ernolition, remaval, dispasal and replacement of four mch
{d") �;oncrete L+kewis� Pr�posal E of Ihe contract prt��l�cics prici�g for `Demcl�lion.
rerno�;al, d�sF�asal and reG!acement of four inr,h {4-i .��p��;�lt ' There was no questian
that the Village intended, and the Viilaga assorts that the contractor understood, thaC
pricing was far the demolition, rQmoval and disposal OF EXISTItVG SIDEWALK
MATERIAI. (regardless of whether it was concrete or asphalt), follow,e� by replacement
�v�th e�t�er concret�e (�roposal A.) or asphalt �;Proposal E1� as dirert�d C�y the 1Aillage frvrn
timz to time and piace to place. It was acknovvledged by the O�`ice of Ir�s�ector Gene�ral
during the exit interr ew for this �ud�t, that if th�e contract proposals hau been written ta say
Derr�o�itian, rem�,�uai, c�isposal OF EXIS�ING SIDE��VALK ti1ATERIAI. an� replacemer�t of
2
Page 25 0�30
OFFICE OF INSPECTaR GENERAL 2�1�-A-O002
"��,��•otlY•r I+. ?UIS
Ivl�enn„rrur��r:!�c•s�i��rr,;�1n rlir.ii!u!�aclri��atiJ..k<'i!rthtitfnfia�i�tuil Crac.irut tic�:�c;tt�'u,t
four �nch (4") concrete (or asphaltF..." the issue Evould not exist. Fur►her, the sugges�ed
c.c�rrer.tive action fo�this finding is to revise the contract langu�ge in this way. Although t�e
Village disagrees that these are questioned costs, and likawise disagrees with th�
assertion that work to remove ald esphalt and replace with a new concrete sidewalk
was outside the scope af the co�tract or was not clearly defined in the contract, the
Village will agree to reviselclarify the contract language as specified herein.
5e�eond, �f the t�ta� costs 12bele� 'questio�ed eosts �r� 1hE� dra�t audit report. $�,9�J�3.40 is
the result of work peeFormed by this contractor on other r�i�lters not assaciate� �v�th Ih�s
conlract, which work vuas procured separaCely and distinetly frorn this contract. Unfortunate-
�y, Ehe contractnr's i�voice for th�s unrelated work was mistakenly labeled as being p�rt of
this contract, and Village staff mistakenly processed the mvo9ce as such.
Finally, the dratt auciFt report labels $3,803.8$ as 'idenli(ieci ccst5' for permit fees re�m-
bursed to the c�nlractor ir� error. However. these fees have been recovered by the
Village in full,
�;i r�� :�r�,�,,,il� r�.; �;�•.t�I� �
1. Amend or re-bid the cantract to clanFy the �ssue of as�halt (and�ar othe� surface)
removal; consicier pigr�yb�cking for these services.
RESPONSF Although the vllage disagrees with the identification of "ques-
tioned costs" and with the Office of Inspector General's above �nalysis of the
contract language, the Village witl nevertheless amend the contract as specified
above to implement this recommendation.
2. Recoup$3,803 88 in perm�t fees re�mb�rsed to the contractor m err�r.
RESPONSE: This has already been completed.
3. Enhance thi: review pruc�s5 fo� �nc�rtiitarinq contrar_t perf�rman;,� a�d invoicing
against contrack t�rrns.
RESPONSE: The Village has already created an administrative pol)cy for
handling pre-construetion coniract processes and will continue to train staff regard-
ing same.
4. Provide additianal train ng to staff on contract reGwrernQn;s.
RESP�NS�= The Village has al�eady created an administrative policy for
handling pre-cor�structi�n contract processes and will continue to train staff regard-
ing same.
� ��� ; Resi�ent carnplaint that ?he contractor performe� �vark wathout �e�nc� issuo� a
proper building permit.
This finding statEs that a� 12 separafe projects that have been completed to datA under the
contract, s�x (6) wera performed prior fo the issuenr,e of a building permit, and the oEMer six
(fi) were ssued sep�rate projecC permits. This �inding aoir�is o�t that the conlract con�em-
plates one rrzaster�errnit'or all wark performed under the cantract, �s c}����se�� lr� ir�divid�al
pro�ect permits. This findir:g also acknowledges lhat the Village has afready taken the
appropriate corrective action by revoking the previously issued six (S) permits and
issuing one rnaster permit as contempldted by the contract. In addition, the Village
3
Page 26 of 30
OFFICE OF INSPECTJR GENERaL 201�-A-OQO2
h'o,�,ruttr 1�._'rl1�
i1�t.77i�JkE'�77f1:f j'fP>j!f��•yC fil:'�!!il(t i7F tifift7[41JK5 G'',L'���1�'i�i:2f:�elt iirr.{���till•:fYttt'IJUI!��+�Jli�At'�
has c�llected all permit fees associated with the master permit and has verified that
surcharge fees submitted to the State of Florida are in the correct arnount.
�:, ' �' . ��I� , �
1. Collect the balance of the permit fees that are st�lE owed by the conirac;or �n the
amounl of$108.71.
RESPONSE This has already been completed.
2. Review the sur�harge amounts paid ta the Stats af Florida �nd provide additianal
payment to the SEate of Florida for a7y surrharges owed, after atiiiiEion�l perr�it fees are
coll+�cted.
�ESPONSE: This has already been completed. Correct permit fees have been
collected fram the contractar. Surcharge amounts were verified as being properly
submitted to the State of Florida.
3 ��dat� pr�licies and procodures Eo pr�vicle addition_al ,yuidance to slaff to e��iSur� the
�roper pro�ect valuation is usec!when caieu at�{iy and billing perrnit fees
R�SF'(�NSt: 7he Village's turrent processes for project valuation are suffi-
cient to provide accurate valuations. Nowever, in conjunction with the newly created
administrative policy referenced above, the Village will continue to train staff ta
ensure proper valuation occurs.
4 Imp!ement a system of tracking and rnonitaring fnr future ;�rojects and permit fe�s
that w�1 be o�ved by the contrac#or under the master permit.
R�SPONSE: The Village's current processes are sufficient to provide accurate
project tracking and monitoring. However. in conjunction with the n�wly created
administrative policy referenced above, the Village will continue to frain staff to
ensure proper tracking and monitoring occurs.
5 Implement �t review pror�ss to ensure that all pro�ects have proper permits pnor to
the c�mmenceme�nl of wcark.
R�SF'UNSE=. The Village has already c�eated an administrative policy for
handling pre-construction co��tract processes �equiring Vfllage const�uction project
"kick-off" meetings with appropriate staff in order to review the project and ensure
that all projects have proper permits prior to the commencoment of wark.
� a�� �; -: Resident complaint that the proper inspect�ons were not performed �y the Vitl�ge
for work�erformed by the contrac#or.
This fin�ing states that khe Villag�did not complete inspections of w�rk performed under th�
contract and m �n�instance maCe fir�al payment prior to a final ir�spection�eing ccn�ucted.
As oF the ��vriting of �his M�nagemen9 response a!I i�spections have been perFormed for
all work to date under the master permit, and all work performed has been deter-
mincd to comply with the applicable requirements of the Florida Buflding Code.
�..: -. - ,- �' !Pi
4
Page 27 of 30
QFFICE OF INSPECTQR GENERAL 2�1�-A-OO'Q2
��'ot�rurl�v 13,'r7l.�
:YGrrriig:�urc�a�!Re>1���ur i�>.�larrfif,�f�i�le�tt��a2k,R�h.,rrlrr�i�i3!rt��nP C:�itwtrti�tnpir Co�ttratc!
1, Include the f�nal permil inspecUon as part af the ii�voice review anci a�prc�val
prceess.
RESPO�ISE: The Village has already created an administrative policy for
handfing construetion contract processes to implement this recomm�ndation.
2. Includ� review af c�ntr�ct requirerrtenls �s part of the ,nvoice review and a�proval
process.
RESPONSE; Tho Villaga has already created an administrati�e policy for
handling constructian contract processes to implement thls recommendatior�.
3. Complele the inspecUon process with a CertiFicate of Complet�on �ssued pr�ur t�t°�al
paym�nt
�ESPONSE: The Village has already created an adrninistrative policy for
handling canstruction contract processes to implement this recommendatian.
a Amend t*�o cor7tr�ct to state thal final payment �vill n�t oecur until a final inspeclian
has occurred and �Certificate af Completion has been issuEd for Ehe particular pro�ect
RESPONSE: The Village will amend the contract to implement this recommen-
datlon.
F � ' t � F�ur (4} of 21 mvaices ur�cier the eantract were pacd autside the 20 business day
timefrarne of the Floric�a Prompt Paymenl Act.
This finding poinl5 c�ut lhal of ihe 21 invoic�s processed under this contract, fQur (4) di� npt
get paid until between 31 and 34 business days after receipt. where th� Flonda Prpm�t
Payment Act requires a 20 business day payment for invoices un�er constructiar contracls.
This finding suggests that the �ayment ceEay may ha�e occurreq becaus� the Village has
not implemented a standard °stamp��g' process upon invoiGe receipt.
The dratt autlit re�c�rl labels $1F1,00 as 'qutsti�ned costs' LVhICII is the potentia: mterest
th�at the conlrac(or could sook to r�eaver fr�rr7 the Village as a resufE ot the delayed pay-
ments.
I:C:_ .� . . .-=`, .,, -
1. Update the Village's purchasin� policy ka include prorrtpt payment act requirements
for construcUon cantract invoices.
RESPONSE: The Village will update its purchasing p�licy to implement this
recommendation.
2. Imple�+nent a process for date stampmg invoices �vhe� re�:.e��ed and pay or rza�cl
construction contr�act invnices within ;he timeframes required by the Florida Prcmpt �ay-
m�nt Act.
RESPONSE: The Village has already created an adrninistrative policy for
handling construction contract processes to implement this recammendation.
3. F'ay the contractor$1(i1.t;U in calu�lat�e�J interest ch�rgas.
RESPONSE: The Village will pay the contractor the calculated interest to
implement this recommendation.
5
Page 28 of 30
aFFfCE OF INSPECTQR GENERAL 2�19-A-00{}2
�\'��cvrrn�ti�r-73, 21J18
:L1eI�er1,,;��rt��t!.4esl�.at�a'le�Aii.li!r���letr•t�.Yrin+P�'iwhr!ihrfron arir!C arstructrnn C';��ih'errt
�,;��.i�,��.� i- Ten (tf?) of 21 inUoic�s under Ihe cantract were paid �nrithout issuing a purchase
order_
This finding ackr�owledges dhat the Village's purchasmg pohcy rec�uires the use o€ a
purchase order for aii invoRces under a cantract, regardless of the amr���rif of the invoics,
and that ten (10} invoices, totalinq $23,842.7� were not paid with a �urch�se order_ N�ne
of the invoic.es paid withouk � p�frchase arder ware in excess oi $10,OOQ.00 which is the
purch;ase order�hr�shnld f�r prnj�c�ts th��l arc not associated with a contraCt. Th�s finding
also acknovrlenges that in the cases whara purchasing orders were used, they were all
appro�ed by the Village Cauncil or the appropriate party, that the purchase arder
information was consistent with the invoice, and that the invaice rakes were can-
sistent with the contract pricing.
The draft audit report labels $23,842.75 as "questioned costs wnich is the am�urt ot
invoices paid w�ithnut a �urchase order under the contract, How�ver, thNs is clearl�+ a
�rocess issue ar7d thera is rt� �all�gation that the funds should not have besn pa3d t� the
c�ntracior.
� �i ._ ,r��!,.,t�-PJ j,'s,f I'_;�`.�_:
. Ccmply with!he purchasing po��cy requirements
RES?ONSE The Viflage wfll amend its purchasing palicy to eiimi�ate the need
to utilize a purchase order for prajects less than E1Q,OQ0.00 regardless of a contract,
Additionally, the Village will continue to traln staff regarding its purchasing policy.
2. Provide addit�c�nai trarniny tn staff nn p�rrr,h�sinc� policy req��irements.
RESPONSE; The Village will continuo to train staff regarding its purchasing
policy.
-�� �+��� i �' Written guidance cantains inconsistent terms.
This finding points out language in the Village's build�ng fee schedu�e and adm�nistrative
amendrnenss to the Florida BuEfciing Code th��t require amendment to b� consistent owth
each other and �vi6h current state law These rc�visions will correct ty�ograph�ca� errors and
bring alder local code current �vitl� rr�or� r�cenl rvvisions to state la��v.
-:t_� � ,:1h� fJ_:"tl , ,J'
1. Update written guidance related to permits, permit f�es, and irivaica payments ro he
�orisistenl throughout all written d��+.:urneni��tion and with state law.
RESPQNSE: The Village will update its written guidance to implement this
recommendation.
2 Pr4vide addition�l lrainirn� to staff on awr�t[en guicance.
RESPONSE� The Vitlage will continue to train staff regarding its perrnits,
permit fees, and invaice payment guidance documents.
- � � '- Tho Villaye s inspection �rocess could be enh,3nc�ti,
This finding points out first that "the majority of #he Village's processes were ade-
quate with proper controls in place." Mowe+�er, this findiryy also suggests an oopc�Runity
6
Page 29 of 30
OFFICE OF INSPECTOR GENERAL 2019-A-OOO2
!\'r>e;Yriuf4•r t i 2Q!4
hf�rihig��n,�rr!!ti cp,�ui;r lo�lii.lil�J�erliu�dfk.!Ca•ii,ihtitLilu�i��uicf C�:�t+trtti ha�u(.':�ulrrr,t
to enhance the Village's inspection process by ensuring Umely entry �f ins�actian data into
the computer tracking system.
F�iF�.;�"1i,,,,.,1E►�Cj��,T�;,�r�
1. Enter permit inspect�ons into the computer Uackiny systerri at the time of occurrence
to ensure accuracy of inspecl�on dales.
RESPONSE; The Village will update its practices and policies to implement
this recommendation.
On behalf af the Acting Village �+fanager and the staff of the Publ�c 'VVorks, Buildmg.
Finance and Administrat�nn DP�artments. I want to thank you and your team for your
c�t�s�rvt�tions arrd sugg`stio�is for irrtproved adrnin+strat�on of the Village's SidewalkS
R�.�habilitat�on and Canstruction Cantract. The Village. d�es not agree wilh all findings made
in the draft audit repart, but also appreciaies that the dr�ft a��dit report cfearfy dispels the
resident complainanYs allegat,ans of corruption in Village government. and acknowledges
many positive things, staGng that "the ma�orily oF the Villag�'s processes were adequate
with proper controls in place.' Further, we fully understand. as A�1r. Carey noted dunng !he
aud�t exit �nterview, that the findings ccnta�ned in the draft audit report are normal an�
ty�ical tindings when th�s type of audit is conducted. Fina�iy, 'he Village acknow►edges anp
' agrees thai implementation of the draft audit report's reco;ttrnendations, as noted in this
response,wdl only serve to make a good system even better,
S�ncer ` '
, ��
l�` - .�
� eith W.��sC�.--
General Counsel. Village of Tequesta
KW D;br
cc: Jam�s A+I. Weinand, Acting Village Manager
7
Page 30 of 30