Section 5: Payments and Final AuditAnchor: #i1005961
Before Final Audit
Actual Cost Upon satisfactory completion of the utility adjustment and upon receipt of final billing prepared in acceptable form, TxDOT will make payment for 90% of the eligible costs shown. 10% is retained pending final audit. Historically, this 10% has been a sufficient margin to cover the citations resulting from an audit and thus preventing over-reimbursement to the utility.
Lump Sum When the utility agreement is on a lump sum basis, eligibility is established upon execution of the agreement, and no final audit is required.
Upon satisfactory completion of the adjustment and receipt of an invoice, and after any necessary amendment of the original lump sum agreement, TxDOT will pay the utility the approved lump sum amount.
The District and ROW Division will conform to the “Prompt Payment” process.Anchor: #i1005988
In reviewing billings and completing the Utility Payment/Billing Checklist, make a final review of the following items before submitting a payment request to the ROW Program Office.
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- The ROW Program Office cannot process the billing for payment until formal conditions placed upon the agreement at time of approval are satisfied. Anchor: #LVEJPTVK
- Eligible replacement utility right of way must be similar in type and size to that being quitclaimed. Anchor: #PFQIOMIV
- Consulting engineering services appearing in the billing require prior approval by TxDOT. Anchor: #VJGIIAMG
- When a major field change is approved and accomplished by the utility, the final billing should be accompanied by “as-built” plans. Anchor: #MEFVSYAE
- All necessary instruments regarding utility property interest have been submitted to the ROW Program Office. Anchor: #KSTGGCSL
- District assurance must be given that an inspection of material removed from the project was made before disposal by scrap or salvage, if such information was not previously submitted. All materials recovered from the project must be listed in the billing. These items should show appropriate credit values whether salvaged or scrapped. Anchor: #LAWNSKDD
- Show the location where the records and accounts billed can be audited. Anchor: #HMEEHAMU
- In addition to showing the beginning and ending dates of the adjustment, verify that no billed costs have been incurred before the right of way release, since those costs are not eligible for reimbursement.
According to 23CFR645, final billings are subject to audit. TxDOT will perform an audit of costs billed. Audits are not required for lump sum agreements.
The ROW Division Utility Portfolio Section is assigned the audit function for utility adjustments. Audits will determine approval of costs for both Federal and State cost participation. Where Federal-aid in right of way is involved, the Federal Highway Administration (FHWA) accepts the single audit concept, and a subsequent audit by FHWA will not be made.
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- When utilities accumulate costs according to work order accounting procedures, as prescribed by an applicable Federal or State regulatory body, they are audited under the governing regulations established by the regulatory body. This is the basic concept of 23CFR 645. Anchor: #RBQGNAMB
- When a utility accumulates cost according to an established accounting procedure developed by the utility and approved by TxDOT, it is audited for consistency in operation, according to the approved accounting practices. In all cases, 23CFR 645 and related directives form the criteria for audit.
When final billing assemblies are adequate, audits may be made based on a desk review. Final billings must support the review. There may be instances where the District will be requested to obtain items from the utility, and will be asked to supply its findings in letterform to allow payment.
For AP or SUP, the District will submit one original of the Form ROW-A-15 and copy of supporting documentation to the ROW Program Office. Reimbursement to the utility will be based upon the result of this audit.
For LUP, the LPA will follow one of two options when requesting reimbursement for incurred utility adjustment costs:
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- Option 1 - The LPA may elect to pay the utility for such costs without previously requesting a review of the final bill by TxDOT and a commitment of TxDOT’s participation. TxDOT then determines the amount eligible for participation through an audit, and reimbursement to the LPA will be governed accordingly. Anchor: #ARLPVEXY
- Option 2 - The LPA may elect not to pay the utility, or make a partial payment to the utility and request a review of the final bill by TxDOT. The LPA then secures a commitment of TxDOT participation before making final payment to the utility. The District will submit one original and three copies of the Form ROW-A-15, and two copies of supporting documentation to the ROW Program Office. One final billing will be forwarded to the External Audit Section for their audit report file. TxDOT then determines the amount eligible through an audit, with the eligible amount becoming the upper limit for TxDOT participation. Reimbursement to the LPA, is based on TxDOT’s commitment, or on the net cost to the LPA, whichever is the lesser amount.
The ROW Division Utility Portfolio Section will schedule the audit. Should any audit citations be noted, adequate time will be provided for a rebuttal. If cited costs are validated and supported, citations may be removed. Audit citations, if any, will be handled as follows:
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- Alternate and
State Utility Procedures - the ROW Division Utility Portfolio Section
will handle audit citations with the utility. The District will
be provided with copies of all citations and related correspondence.
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- The audit role carries with it possible citations against TxDOT, as well as against the utility. Anchor: #GIOPSBEH
- When citations are issued against TxDOT, they are not forwarded or transmitted to the utility but rather are resolved in joint action by the ROW Program Office, the District, and the ROW Division Utility Portfolio Section. In the case of Federal-aid in right of way, FHWA may be involved as well. Anchor: #BKCTJEWT
- The utility will not receive final payment for the utility adjustment until the completion of the audit, reconciliation of any audit citations, and final receipt of all required documents.
- State & LPA - the ROW Division Utility
Portfolio Section will handle the audit citations with the LPA unless
requested by the LPA to handle audit citations directly with the
utility. The request to handle audit citations directly with the
utility should be incorporated by the LPA in the bill submission.
Copies of the audit citations and related correspondence will be
forwarded to the District.
- In Option 2 above, TxDOT’s upper limit of participation, once it has been determined, will be supplied to the District by the ROW Program Office for transmittal to the LPA involved, which will pay the utility in full before requesting reimbursement in the amount of TxDOT’s share. Anchor: #NBMXRURU
- LPAs are not reimbursed for TxDOT’s share of such costs until completion of the audit, reconciliation of any audit citations, and final receipt of all required documents.
- The TxDOT Inspector’s project diary may
be consulted to aid in determining eligibility of some charges.
NOTE: On lump sum utility agreements, eligibility was established at the time of agreement execution; therefore, no final audit is required.
After Final Audit
After final audit and resolution of any cited items, the ROW Program Office will prepare a Form ROW-A-15 for retainage due. The Finance Division will prepare a voucher as final payment to the utility.Anchor: #i1006150
Records of Cost
The total cost of utility adjustments is recorded on a right of way project basis and reflects partial payment as well as final payments. These utility cost records are maintained at the “Project” level, and each District should maintain similar records. The costs of utility adjustments are considered as part of the right of way project cost, according to Transportation Code Section 224.008.
For record retention information, refer to the TxDOT Records Management Manual.