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Report Number:

2006-059

Report Title:

Department of Environmental Protection - Administration of Fixed Capital Outlay Projects - Operational Audit

Report Period:

07/2003-02/2005 and Selected Actions through July 2005.

Release Date:

11/28/2005

This audit of the Department of Environmental Protection (Department) focused on the administration of fixed capital outlay projects during the period July 2003 through February 2005, and selected actions taken through July 2005.  As summarized below, we noted deficiencies in the awarding of construction contracts and the recording of fixed capital outlay expenditures in the capital asset accounts and records.

Finding No. 1:    The Department utilized a process for awarding construction contracts with expenditures totaling $8.7 million that was not competitive and did not comply with applicable rules and Department policy.  Consequently, the Department cannot be assured that it received the best value for construction projects.

Finding No. 2:    Employees involved in the selection process for construction contracts were not required to provide written attestation of their independence regarding the entities subject to award of contracts.  Such attestations would help ensure the selection of contractors in a fair and open manner.

Finding No. 3:    The Department did not have effective controls in place to ensure timely and accurate recording of fixed capital outlay expenditures in the capital asset accounts and records.

The Secretary's response is included at the end of this report as Appendix D.