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Section 2: Project Close-Out

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Overview

Project close-out is a critical step in the project and is necessary to complete the requirements of the advance funding agreement (AFA). Close-out includes a project review by TxDOT to: (1) determine if all work was completed and acceptable to TxDOT; (2) determine each party’s final cost share for the project; (3) process the final payment to close the work on the project; and (4) complete the project audit. The close-out process requires the LG to provide all necessary project documentation to TxDOT for review. Upon completion of its review, TxDOT will return project documentation to the local government (LG) to be retained in the LG’s project files as defined in the AFA.

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Project Review

Within 90 days of project completion, the LG must submit to the TxDOT district the final reimbursement request with backup documentation and the project records for final review and audit. All requests for reimbursable costs must be submitted no later than 90 days after the project completion end date as established pursuant to 2 CFR 200.210(a)(5). The Local Government Project Management Guide (LGPM Guide) describes the procedures that must be followed to complete the process.

Federal Requirements

  1. 2 CFR 200.210(a)(5) – Requires a period of performance start and end dates to be established in the federal award documents.
  2. 2 CFR 200.343(b) – All requests for reimbursable costs must be submitted no later than 90 days after the project completion end date.
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Final Close-out

The primary responsibility to fiscally close-out a AFA project lies with the TxDOT district. The district maintains cost data throughout the project and should determine the actual shared cost at the conclusion of the work on the project. The LGPM Guide provides more information regarding the procedures for final close-out of the project. The district should prepare a statement of cost detailing the necessary information that would allow the TxDOT Finance Division (FIN) to refund money or notify FIN that additional funds must be being collected. FIN will submit FWHA Form PR-20 to the Federal Highway Administration (FHWA).

If additional funds are found to be due from the LG and are not paid, TxDOT will follow the procedures set forth in 43 TAC §5.10, relating to the collection of funds due the state.

Federal Requirements

  1. 2 CFR 200.210 – Requires a period of performance start and end dates to be established in the federal award documents. All requests for reimbursable costs must be submitted no later than 90 days after the project completion end date.
  2. 2 CFR 200.343(a) – Requires the LG to submit, no later than 90 days after the end date of the period of performance, all financial, performance and other reports as required by the terms and conditions of the federal award.
  3. 2 CFR 200.343(g) – Requires the federal awarding agency or pass-through entity to complete all closeout actions no later than one year from the receipt and acceptance of all required final reports.
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Audit

Provisions in the AFA between TxDOT and the LG dictate the project audit requirements. The Local Project AFA will contain project specific information on audit requirements.

The Master AFA (MAFA) Provision 22 – Inspection of Books and Records states: “the State, the Local Government, and the FHWA (if federally funded) and their duly authorized representatives shall have access to all the governmental records that are directly applicable to the agreement for the purposes of making audits, examinations, excerpts, and transcripts.”

In addition, for federally funded agreements, MAFA Provision 23 – Office of Management and Budget Audit Requirements requires the parties to the agreement to comply with the requirements of 2 CFR Part 200, Subpart F regarding single audit reports (previously referenced and stipulated in OMB Circular A-133).

If there is some concern over project records or finances, the TxDOT district engineer can request an audit of a project by the TxDOT Audit Office.

Federal Requirements

  1. 2 CFR Part 200, Subpart F – Sets forth the audit requirements for the audit of non-federal entities expending federal awards.
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Document Retention

When a contract is closed out, the project documents should be securely stored by the LG and protected until the legal document retention requirements have been met as specified in the AFA. The project documents must be kept during the contract period and for the length of time after completion of project activities as specified in the AFA, in accordance with any applicable federal requirements, until completion of all audits or until any pending litigation has been completely and fully resolved, whichever occurs last. However, if the AFA includes right of way or surviving (permanent) maintenance provisions, the file must be retained indefinitely.

More information on the retention of documents is included in Chapter 2 and Chapter 9 of this Manual. In addition to the project documents retained by the LG, TxDOT may also retain project-related documents. The TxDOT documents need to be retained pursuant to the AFA and TxDOT’s document retention policy.

Federal Requirements

  1. 2 CFR 200.333 – Requires all financial records, supporting documents, statistical records and all other LG records pertinent to a federally funded project be retained for a period of three years from the date of final submission of the final expenditure report, unless certain other exceptions arise such as litigation or ongoing audit.
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Disposition of Excess Property

General

Consideration should be given for the disposition of property interests that have been recommended as being no longer needed for highway purposes. TxDOT’s Right of Way Division is available to facilitate all dispositions of real property. Additional information on the disposition of property can be found in TxDOT’s Right of Way Manual, Vol. 5 – Property Management. Local governments should also be aware that certain requirements apply to the disposition of real property acquired as part of a federally assisted project.

Federal Requirements

  1. 23 CFR 710.409 – Specifies federally funded projects with real property interest in excess of transportation needs may be sold or conveyed to a public entity or to a private party in accordance with 23 CFR 710.403(d).

State Requirements

  1. Texas Transportation Code Chapter 202, Subchapter B – Provides for the sale, exchange or return of any interest in real property no longer needed for a state highway purpose.

Required Practices

In general, the LG should coordinate the disposition of property with TxDOT at the completion of the project. The LGPM Guide provides the required practices for the disposition of property, as well as the responsibilities of the LG and TxDOT.

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