HUMAN SERVICE TRANSPORTATION MANAGEMENT PROGRAM. N. C. Department of Transportation Public Transportation Division (PTD)

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1 APRIL 2015 State Authorization: N.C.G.S. Article 2B of Chapter 136 N. C. Department of Transportation Public Transportation Division (PTD) Agency Contact Person Program Debra G. Collins, Director Public Transportation Division N.C. Department of Transportation 1550 Mail Service Center Raleigh, NC (919) (919) Address Confirmation Letters To Wayne Davenport, Lead Auditor, CICA, CFS Single Audit Compliance Unit N. C. Department of Transportation 1507 Mail Service Center Raleigh, N.C (919) Fax (919) The auditor should not consider the Supplement to be safe harbor for identifying audit procedures to apply in a particular engagement, but the auditor should be prepared to justify departures from the suggested procedures. The auditor can consider the supplement a safe harbor for identification of compliance requirements to be tested if the auditor performs reasonable procedures to ensure that the requirements in the Supplement are current. The grantor agency may elect to review audit working papers to determine that audit tests are adequate. The Single Audit Compliance Unit of the NCDOT Office of Inspector General reviews all single audits, financial audits, and management letters of all grantees. We are looking at both the presentation (information as to program, pass-through and state funding, NCDOT identification numbers) and the dollar amounts presented versus our records. Any reports not received will be requested. Grants must be properly identified by program name ( Human Service Transportation Management Program ), DOT number ( DOT-3 ) and WBS number on the Schedule of Expenditures of Federal and State Awards. This information is available from the agreement with NCDOT; program name is in the second/third paragraph while the WBS number is on the upper right hand corner of the first page. Grantor and/or pass-through grantor and program title should be included. Please do not combine like projects into one-dollar amount since we would need to call you for the breakdown; please report award amount, Federal Pass-through, State share and local share. On NCDOT s confirmation from the Grant Master List (GML), these moneys are shown by DOT number DOT-3. C-4 DOT-3 1

2 I. PROGRAM OBJECTIVES The objective of the Human Service Transportation Management Program (HSTM) is to provide human service clients with safe and reliable transportation and to ensure that human service transportation across the state is provided in the most efficient and cost effective manner, using the highest level of coordination possible. The HSTM Program provides state funds to rural transportation systems for administrative costs to coordinate transportation services for those systems that do not provide general public service. HSTM program funds are also used to provide financial assistance to community transportation systems in urban counties to meet the system s administrative costs associated with the nonurbanized portion of the service. II. PROGRAM PROCEDURES The program is administered by the Public Transportation Division of NCDOT. Recipients are lead transportation agencies identified in the locally adopted Community Transportation Services Plan. Human service transportation systems that have demonstrated a high level of coordination within their county or counties and do not receive Section 5311 administrative assistance are eligible to receive HSTM funds. Human Service Transportation Programs are eligible for ROAP funds, however, they are not eligible for the RGP portion. Reference: ROAP State Management Plan, Rural General Public section, page 11. The funds may be used for eighty-five percent (85%) of the salary and fringe benefits of either a full-time transportation coordinator position or a part-time coordinator position where the size of the system and number of human service agencies does not require a full-time coordinator. Funds are also available to support training costs for the transportation system s administrative and operating staff. The maximum amount of state funds is based on the individual system s administrative funding level as determined by the Public Transportation Division. The transportation coordinator can be an employee of the system or an employee of the private transportation provider who is under contract to coordinate services and operate the system. Funds cannot be used for operating or capital expenses. Funds may also be used for the administrative costs of community transportation systems operating in urban counties of the state. For these systems, administrative budgets are commensurate with the Community Transportation Program (CFDA ). An application from the designated lead transportation agency is required to receive the funds. Funding applications are submitted annually to the Public Transportation Division and upon review and approval, are presented to the North Carolina Board of Transportation for funding approval. III. COMPLIANCE REQUIREMENTS 1. ACTIVITIES ALLOWED OR UNALLOWED Compliance Requirement - Funds must be expended in a manner consistent with the program guidance issued by the Public Transportation Division for the HSTM program application. Audit Objective Determine that funds were expended only for the specified program following the project budget. Funds are to be used only to support the administrative costs associated with the nonurbanized portion of the service for areas located in urbanized counties. C-4 DOT-3 2

3 1. Ascertain that services/expenditures conform to the project budget. 2. Test expenditures and related records for compliance with the program requirements. 4. CONFLICT OF INTEREST POLICY Compliance Requirement N.C.G.S. 143C-6-23(b) requires each non-state entity eligible to receive state funds to have a conflict of interest policy which addresses conflicts that may arise when members of its governing body or its managing employees are involved in the disbursement of state funds. The entity is required to have a copy of their entity s policy on file with the disbursing state agency before any funds are disbursed; this policy shall be approved by the entity s governing board and a notarized statement of the board s action shall be attached. All members of the board and management shall be familiar with and follow the policy and the legislation. The entity should have written procedures of how the conflict of interest policy is enforced. Also note: N.C.G.S Public officers or employees benefiting from public contracts; exceptions. Audit Objective - Determine if the policy statement has been provided to the disbursing state agency, to current members of the board and management and efforts are made to follow the policy. 1. Obtain a copy of the policy and transmittal letter to the agencies disbursing state funds to the nonprofit entity. 2. Verify the existence and enforcement of the entity s procedures. 7. MATCHING, LEVEL OF EFFORT, EARMARKING Compliance Requirement - The HSTM funds can be used to support up to 85% of the administrative cost of staff who are responsible for coordinating the transportation services and for employee training expense. The remaining 15% local match can be derived from the operating fee charged to human service agencies or local revenue. Funds may also be used for the administrative costs of community transportation systems operating in urban counties of the state. For these systems, administrative budgets are commensurate with the Community Transportation Program (CFDA ). Audit Objective Determine if expenses are allowable and acceptable. 1. Compare the total reported project cost with the financial records to determine whether the expenses are allowable and acceptable as claimed, including verification of the portion of service provided outside the urbanized area based on program guidelines. C-4 DOT-3 3

4 2. Review financial records and determine the sources, amounts and acceptability of the state and local share. 3. Review financial records and determine the amount that can be claimed as the state share. 4. Determine whether program funds were correctly applied. ROAP State Management Plan, Appendix A, page 13, Eligible Transportation Expenses Matrix. 12. REPORTING 1. Financial Reporting Compliance Requirement - Quarterly invoices for eligible project costs are required to be submitted to NCDOT within 30 days following the end of each quarter. Audit Objective Determine if invoices were submitted as scheduled. - Sample invoice package to determine invoices were submitted as required. 2. Non-governmental Reports made by non-state entities Compliance Requirement North Carolina General Statute 143C-6-23 Use of State Funds by Non-State Entities, and North Carolina Administrative Code Chapter 9, Subchapter 03M Uniform Administration of State Grants addresses reporting requirements for non-governmental entities. These regulations along with reporting forms may be accessed at: Audit Objective Determine applicable reporting requirements. 1. Determine if the organization is subject to G.S. 143C Determine what type of filing/report should be made with the NCDOT. 3. MBE/WBE/HUB Reports Compliance Requirement - Grantees must submit quarterly MBE/WBE/HUB Report of Awards and Report of Payments (DBE-IS Form) documenting actual utilization of Minority Business Enterprise, Women Business Enterprise and Historically Underutilized Business Enterprise as specified in all grant agreements executed after October 1, To monitor the progress of the MBE/WBE/HUB C-4 DOT-3 4

5 program, recipients are required to submit the DBE-IS form with their quarterly invoices based on a record keeping system. Audit Objective - Determine MBE/WBE/HUB reports are supported by adequate documentation. 1. Review grantee s MBE/WBE/HUB contract expenditures as defined in the grant agreement and the NCDOT Public Transportation Division Disadvantaged Business Enterprise External Procedures. 2. Review the reports and trace the information to underlying data to determine completeness and accuracy. 3. Determine that for all participation amounts reported, the firms have been certified and that the certification is current. Participation by non-certified firms is not allowed. C-4 DOT-3 5