I am pleased to submit this Annual Report on the operations of the Florida Department of
Transportation’s (department) Office of Inspector General (OIG), covering the period from July 1, 2016 to June 30, 2017.
During this period, the OIG’s audit section worked extensively with the department’s districts and program offices to help ensure the efficiency and effectiveness of department programs. We completed 76 audit products examining topics such as the department’s compliance with the provisions of the Governor’s Executive Order governing ethics, grant management practices in District Two’s transit function, the sufficiency of the operating agreement between District Four and the South Florida Regional Transportation Authority, the adequacy of the department’s monitoring of a speed control grant by the department’s Safety Office, an information technology access control audit, and an engagement to determine if asset maintenance contracts comply with applicable laws, rules, procedures, and guidance, and are consistent from district-to-district.
The OIG’s Investigations Section continued to resolve allegations of contract fraud and significant employee misconducts while deterring and detecting activities that jeopardize the department’s resources. We received 235 inquires/complaints, made 161 referrals to management, forwarded 42 complaints to other agencies and opened 32 investigations. We pursued five investigations jointly with law enforcement partners based on a reasonable suspicion that a crime had taken place. We issued investigative reports on topics such as prime contractors submitting certifications to the department attesting to payment to sub-contractors when no such payment was made, contractors certifying the use of compliant materials when cheaper or inferior products were used, employees accepting gifts or gratuities from entities doing business with the department, and allegations of a variety of thefts of department property. Key to the fraud and misconduct deterrence aspect of our
mission, we also conducted 19 fraud awareness briefings statewide, attended by 840 department employees and partners in industry.
We look forward to continued and close coordination with the Secretary, agency leadership,
members of the Department of Transportation team, and our statewide partners in industry to help the department meet challenges and opportunities they face in keeping the transportation
infrastructure in Florida efficient, effective and safe.
Robert E. Clift
September 28, 2017
Certified Public Accountant (CPA) Work Paper Reviews and Cognizant Letters
CPA work paper reviews are conducted to obtain reasonable assurance that the CPA, which conducted the contractor’s indirect cost rate audit: gathered and maintained sufficient evidence in the audit work papers to support audit conclusions; provided an opinion on the indirect cost rate schedule; issued a report on internal controls over financial reporting; and, complied with Generally Accepted Government Auditing Standards (GAGAS). A cognizant letter is issued when Florida is either the home-state or designee.
The Intermodal Audit Unit performs audits and reviews to determine if recipients of state financial assistance and sub-recipients of federal pass-through funds are carrying out the program’s purpose and associated costs are allowable pursuant to the department’s agreements. Engagements consisted of railroad labor additive rates, transportation authorities, airport, seaport, and transit grants, utility relocation costs, indirect cost allocation and fringe benefit rates, as well as other accounting services
The Investigations Section’s mission is to deter, detect, and investigate crimes or misconduct impacting the department.
The Investigations Section manages several case types, such as substantive investigations, joint investigations, preliminary inquiries, management referrals, and other agency referrals.
Duties and Responsibilities The Investigations Section pursues department employees, contractors, vendors, and/or the public who attempt to gain a benefit for which they are not entitled. The Investigations Section operates in accordance with the Association of Inspectors General Principles and Standards for Offices of Inspector General, accreditation standards established by the Florida Commission for Law Enforcement Accreditation, and works closely with other law enforcement partners to accomplish its mission.
The Investigations Section’s duties and responsibilities are to:
Receive complaints and coordinate activities of the department in accordance with the Whistleblower’s Act pursuant to Sections 112.3187-112.31895, Florida Statutes.
Receive and consider complaints that do not meet the criteria for an investigation under the Whistle-blower’s Act and conduct, supervise, or coordinate such inquiries, investigations, or reviews as the inspector general deems necessary.
Report expeditiously to the Florida Department of Law Enforcement or other law enforcement agencies when the inspector general has reasonable grounds to believe there has been a violation of criminal law.
Conduct investigations and other inquiries free of actual or perceived impairment to the
independence of the inspector general or the Office of Inspector General, including freedom from interference with investigations, timely access to records, and other sources of information.
Submit final reports of investigations timely to the Governor’s Chief Inspector General and Florida Department of Transportation’s Secretary.
The Investigations Section’s mission is to deter, detect, and investigate crimes or misconduct impacting the department. FDOT – Office of Inspector General 23 FY 2016-2017 Annual Report
Cases Completed: Contract Fraud
150-16151: Unapproved Sub-Consultant Performed Testing
Accusations were made that an unapproved third tier sub-consultant performed soil test boring on two department bridge replacement projects. Based on a review of documents and interviews conducted, it was determined that an unapproved third tier sub-consultant performed the tests as alleged; however, the primary sub-consultant did not bill the two prime contractors for the work performed. This inquiry was referred to district management and the department’s Office of Construction for informational purposes. This case was proved.
150-16049: Prime Contractor Falsely Certified Payments to
A prime contractor was accused of submitting to the
department false Contractor’s Affidavit and Surety
Consent Form 21-A, that certifies at the completion of a
project and that all sub-contractors have been paid. It
was alleged the prime contractor received approximately
$82,000 for additional work completed by a subcontractor,
and failed to pay the sub-contractor. The
investigation established that the sub-contractor was not
paid for the additional work and that the Form 21-A
falsely reflected that all subcontractors had been paid.
Based on the records reviewed and interviews
conducted, the allegation that the prime contractor
submitted false 21-A forms was proved.
150-14095: Prime Contractor Accused of Non-payment to Sub-contractors
An allegation was made that a prime contractor submitted fraudulent notarized Certifications
Disbursement of Previous Periodic Payments to Sub-contractors. The Federal Bureau of
Investigations (FBI) was notified of possible criminal violations and declined to initiate an
investigation due to the surety fully compensating the unpaid sub-contractors. The investigation proved the contractor violated department standard specifications by falsely submitting notarized certifications that all sub-contractors were paid when the facts proved otherwise. The prime contractor was placed on the department’s Contractors Suspension List for a period of five years.
150-16210: Contractor Accused of Intentional Work Slow-down to Exceed Contracted Budget
It was alleged that a sub-contractor to the prime providing professional services on a department contract intentionally slowed down their work performance in an effort to deliberately exceed the contracted budget. It was also alleged the sub-contractor did not conduct traffic counts and falsified traffic reports that were provided to the department. The contract was to provide the department with professional services for conducting traffic, operational and safety studies, as well as plans preparation. The OIG completed interviews and reviewed records and found no evidence to support
150-15120: Prime Contractor Accused of Falsifying Records
It was alleged that a prime contractor used non-compliant
materials on a department contract. The investigation
proved the contractor was not consistently in compliance
with the terms and conditions of the contract and found to
be using non-compliant materials on two department
contracts. The case was referred to the Office of
Construction and the district for action. In addition to
corrective action taken, the contractor repaid $390,000 to