Current through Register Vol. 51, No. 6, December 1, 2024
RELATES TO: KRS 177.035, 177.170, 177.430(5), 179.265, 23 C.F.R. 140, 645, 646, 48 C.F.R. 31
NECESSITY, FUNCTION, AND CONFORMITY: KRS 177.430(5) authorizes
the cabinet to promulgate administrative regulations relating to utilities on a
turnpike project. This administrative regulation establishes the audit
methodology to be used by a cabinet auditor for auditing reimbursable expenses
incurred by a railroad or utility under an agreement with the Transportation
Cabinet; establishes the requirements for keeping financial records; and
requires all utilities and railroads contracting with the cabinet to comply
with the federal regulations.
Section
1. Utility's Eligible Costs.
(1)
The eligible costs a utility incurs in participating in a highway construction
project by providing relocation or reconstruction of its facility shall be
governed by 23 C.F.R. 645.
(2) A
cost not in compliance with 23 C.F.R. 645 shall be disallowed.
Section 2. Railroad's Eligible
Costs.
(1) The eligible costs a railroad
incurs in participating in a highway construction project by providing
relocation, construction, or reconstruction of its facility or the elimination
of a hazardous highway-rail crossing shall be governed by 23 C.F.R. 646 and 23 C.F.R. 140, Subpart I.
(2) A cost
not in compliance with 23 C.F.R. 140, Subpart I or 23 C.F.R. 646 shall be
disallowed.
Section 3.
Financial Records of a Utility or Railroad.
(1) A railroad or utility shall provide the
cabinet timely access to all financial and cost information necessary to verify
the railroad's or utility's actual costs for the relocation, construction or
reconstruction of its facilities directly associated with a cabinet
project.
(2) A railroad or utility
shall maintain payroll and time records for all employees for three (3) years
from the final payment or until an audit has been performed, whichever is
first.
(3) A utility or railroad
which is required to relocate its facilities for a state-funded highway
construction project shall maintain its records in accordance with the
provisions of 48 C.F.R. 31.
(4) If
a railroad or utility is notified by the Transportation Cabinet of a pending
audit, the railroad or utility shall provide the following:
(e) Indirect cost analysis;
(g) Budgetary information;
(h) Betterment determination;
(i) Project-related employee
expenses;
(j) Payroll register;
and
(k) Cancelled payroll
checks.
Section
4. Audit Standards. The Transportation Cabinet, if auditing a
railroad or utility, shall abide by the accounting and auditing standards
contained in the following:
(1) "Government
Auditing Standards", 2003 Revision;
(2) "Codification of Statements on Auditing
Standards, (Including Statements on Standards for Attestation Engagements)";
and
(3) "Original Pronouncements,
Accounting Standards as of June 1, 2005, Volume I, Volume II, and Volume
III".
Section 5. Audit
Findings.
(1) Prior to the issuance of a final
report, the auditor from the Transportation Cabinet shall present the
preliminary findings and relevant work papers to the railroad or
utility.
(2)
(a) A comment about or objection to the
preliminary findings shall be submitted to the originating office within the
Transportation Cabinet in writing within fifteen (15) calendar days of the
railroad's or utility's receipt of the preliminary findings.
(b) A comment or objection shall be taken
into consideration by the external audit staff prior to finalizing the
report.
(3)
(a) If a railroad or utility disagrees with
the results of a final report issued by the external audit staff, the railroad
or utility may request a review by the External Audit Review Committee within
thirty (30) calendar days of the date the final report is received by the
utility or railroad.
(b) The
request shall be in writing and clearly state the concern with the final report
and the reason for the concern.
(c)
If the concern and the reason are not clearly stated, the request for review
shall not be accepted.
Section 6. External Audit Review Committee.
(1) The External Audit Review Committee shall
consist of the following:
(a) The Executive
Director of the Office of Budget and Fiscal Management, Chairperson;
(b) Deputy State Highway Engineer for Project
Development; and
(c) Executive
Director of the Office of Legal Services.
(2) A committee member may appoint a proxy to
serve on this committee.
(3) The
External Audit Review Committee may request the utility, railroad or the
auditor to answer questions. The request shall state if a representative is to
appear in person, by electronic communication, or in writing.
(4)
(a) If
the railroad or utility is not satisfied with the decision of the Audit Review
Committee, an appeal may be made to the Secretary of the Transportation Cabinet
within thirty (30) calendar days of receipt of the committee's
decision.
(b) An administrative
hearing to hear the appeal shall be held pursuant to the provisions of KRS
Chapter 13B.
Section
7. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Government Auditing Standards"
by the Comptroller General of the United States, 2003 Revision;
(b) "Codification of Statements on Auditing
Standards, (Including Statements on Standards for Attestation Engagements)", by
the American Institute of Certified Public Accounts, Inc., copyright 2006;
and
(c) "Original Pronouncements,
Accounting Standards as of June 1, 2005, Volume I, Volume II, and Volume III"
published by the Financial Accounting Standards Board.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Transportation
Cabinet, Transportation Cabinet Office Building, External Audit Branch, 200
Mero Street, Frankfort, Kentucky 40622, Monday through Friday, 8 a.m. to 4:30
p.m.
STATUTORY AUTHORITY: KRS 177.430(5)