Code of Massachusetts Regulations
963 CMR - MASS. SCHOOL BUILDING AUTHORITY
Title 963 CMR 2.00 - School Building Grant Program
Section 2.17 - Audit Procedures
Universal Citation: 963 MA Code of Regs 963.2
Current through Register 1531, September 27, 2024
(1) General Audit Process.
(a) In order to determine the eligible costs
of an Approved Project and to ensure that only eligible costs are included in a
Total Facilities Grant, the Authority shall conduct an Audit or Audits of each
Approved Project, at such time or times as may be required by the Authority.
The Authority may designate any person it deems qualified to perform an Audit,
and such person shall use agreed upon procedures, as determined by the
Authority in the performance of said Audit or Audits. Such person shall certify
in writing to the Authority that, in conducting the Audit or Audits on behalf
of the Authority, he or she is and shall remain in full compliance with the
Massachusetts Conflict of Interest Law, M.G.L. c. 268A.
(b) The Eligible Applicant shall cooperate
with the Authority and/or its designee, if any, in the conduct of an Audit or
Audits. Such cooperation shall include, but not be limited to, scheduling,
provision of Audit Materials, provision of adequate workspace, responding to
requests for documents, providing access to personnel with knowledge of the
Approved Project, providing access to Approved Project related materials stored
electronically, or complying with any other requirement of the Authority for
the thorough and expeditious conduct of the Audit.
(c) Audits of Approved Projects shall be
performed in accordance with MSBA Audit Guidelines, established by the
Authority.
(d) Except as provided
in 963 CMR 2.00, the cost of the Audit or Audits shall be borne by the
Authority. If the Authority determines that the Eligible Applicant:
1. has not reasonably cooperated with the
Authority in the conduct of an Audit or Audits; or
2. is responsible for any delay in an Audit
or Audits the Authority may, in its sole discretion, deduct all or a portion of
the cost of conducting an Audit or Audits from the Eligible Applicant's Total
Facilities Grant, discontinue making payments to the Eligible Applicant, or
seek to recover any payments that the Authority may have already made to the
Eligible Applicant.
(2) Progress Payment Audits.
(a) The Authority, and/or
its designee, shall perform an Audit of each request for reimbursement
submitted by an Eligible Applicant for an Approved Project. Each Audit shall be
conducted according to 963 CMR 2.00 and the MSBA Audit Guidelines. In the event
that the Authority determines that an item in the submittal is ineligible for
reimbursement, the Authority shall adjust the amount of reimbursement to
account for the ineligible costs. The Eligible Applicant shall receive from the
Authority a summary letter recapitulating the eligible and ineligible costs as
determined by the Authority.
(b) If
an Eligible Applicant does not concur with the findings of the summary letter,
the Eligible Applicant shall respond in writing within ten business days of the
date of said letter. The Eligible Applicant's written correspondence shall
include a detailed listing of the specific ineligible costs to which the
Eligible Applicant does not concur. For each ineligible cost being contested by
the Eligible Applicant, the Eligible Applicant shall submit to the Authority
documentation that supports the Eligible Applicant's position. If no supporting
documentation is submitted within ten business days after the date of the
Eligible Applicant's letter, or within a reasonable amount of time as
determined by the Authority, the Eligible Applicant's objection to the
Authority's determination of ineligible costs shall not be accepted and the
Authority's audit findings shall stand. The Authority shall review properly
submitted documentation to determine if the Eligible Applicant's objection has
merit and take the appropriate action thereafter. If the Authority determines
that the Eligible Applicant's supporting documentation is insufficient, the
audit findings will stand. In no event including, but not limited to the final
Audit, shall the Authority reconsider ineligible costs once the process
outlined above has been completed. All costs related to a further review may be
assessed to an Eligible Applicant.
(3) Final Audit Report.
(a) A final Audit is
required to determine the final Total Facilities Grant due to an Approved
Project. The Authority and/or its designee shall prepare a draft report, in a
form to be determined by the Authority, stating Audit findings and conclusions.
The draft report may include findings, schedules and ineligible costs as
determined by the monthly Audits performed for Approved Projects receiving
funding from the Authority under the progress payment system. The draft report
shall be reviewed by the Authority. Following the Authority's review of a draft
report, the report shall be made available to the Eligible Applicant. If an
Eligible Applicant accepts the draft report, said Eligible Applicant shall
submit a signed Acceptance Form to the Authority within ten business days of
the date of the draft report letter by concurring with the schedules, findings
and ineligible costs contained in the draft audit report, in which case the
draft report shall be submitted to the Board of the Authority for its review
and approval. Acceptance of a draft report by an Eligible Applicant does not
bind the Authority to take any action regarding the determination of the Final
Project Costs of an Approved Project.
(b) If an Eligible Applicant declines to
accept the draft report, said Eligible Applicant shall submit a signed
Non-Acceptance Form to the Authority within ten business days of the date of
the draft report letter. The Authority, in its sole discretion, may grant
additional time in which the Eligible Applicant may respond, but in no event
shall such additional time exceed an additional ten business days. These
deadlines must be met in order to be eligible to dispute draft findings. Said
written correspondence shall include a detailed listing of the specific
ineligible costs to which the Eligible Applicant does not concur and for each
ineligible cost, documentation that supports the Eligible Applicant's position.
If no supporting documentation is included in said written correspondence, the
Eligible Applicant's objection to the draft report shall not be accepted and
the draft report, as originally reviewed by the Authority, shall go to the
Board of the Authority for approval. The Authority shall review properly
submitted documentation to determine if the Eligible Applicant's objection has
merit or not, and take the appropriate action thereafter. If the Authority
determines the Eligible Applicant's supporting documentation has no merit the
audit findings will stand, and the Eligible Applicant will have exhausted all
of their opportunities to dispute the findings to the Authority. In no event
shall the Authority reconsider ineligible costs once an audit report has been
settled. All costs relating to disputing a draft audit report may be assessed
to an Eligible Applicant.
(c) All
prior audit decisions by the Authority shall stand and an Eligible Applicant
shall have no right to re-file or request review of previous audit decisions,
nor shall the Authority have any obligation to review any previous audit
decision.
(4) Recordkeeping.
(a)
Eligible Applicants shall maintain all records related to an Application, a
Proposed Project, and/or an Approved Project, if approval for a Proposed
Project is granted by the Authority, to ensure that minimum recordkeeping
requirements to facilitate uniform, fair and efficient administration are met
and to ensure accountability for all documents. Nothing in 963 CMR 2.00 is
intended to alter the otherwise applicable requirements of M.G.L. c. 66,
pertaining to the keeping of public records and access thereto.
(b) It shall be a condition on every Eligible
Applicant that the Eligible Applicant maintains, in a secure place and in an
organized fashion, all records necessary to evidence conformity with M.G.L. c.
70B, 963 CMR 2.00, and any other requirements of the Authority.
(c) The Eligible Applicant shall maintain all
records related to an Approved Project, including, but not limited to, a full
set of the Project Documents, requests for proposals, proposals and
evaluations, and "As-Built" documents, for as long as the Approved Project is
in service as a public school. For the purposes of
963
CMR 2.17(4), "all records"
shall include, but not be limited to:
1. all
executed contracts and purchase orders, including contract amendments and
change orders;
2. all completed
Sources and Uses Forms
3. all Third
Party Funding disclosure and payment records
4. all Owner's Project Manager's reports,
including monthly progress reports;
5. issues log;
6. the logs for potential change orders and
executed change orders;
7. all
meeting minutes;
8. a schedule or
milestone summary;
9. all requests
for reimbursement and forms as submitted to the Authority;
10. all commissioning reports, final reports
and commissioning certifications;
11. all close-out documents and training
materials;
12. all contractor and
designer evaluations as submitted to the Division of Capital Asset Management
and Maintenance and the Authority;
13. all invoices and contractors'
applications for payment; and
14.
other such other information, data, logs, documentation, or records as may be
required by the Authority.
(d) The Authority shall, in its sole
discretion, disallow any costs not adequately supported by contemporaneous,
accurate and complete records.
(5) Ineligible Costs. Costs that are categorically ineligible for reimbursement or payment by the Authority shall include, but not be limited to:
(a) Any costs for an Approved Project in
excess of the Total Facilities Grant.
(b) Financing costs incurred by an Eligible
Applicant, including, but not limited to, interest, principal, costs of
issuance and any other cost related to short or long term bonds, notes or other
certificates of indebtedness, refunding notes or bonds, temporary loans, or any
other form of indebtedness issued by an Eligible Applicant in relation to an
Approved Project.
(c) All costs
associated with credit rating services, legal services related to the issuance
of any indebtedness, and financial consulting services.
(d) The cost of legal services.
(e) The provision of any direct or indirect
municipal services shall be ineligible costs, except the provision of public
safety services as required by law, or services which the Authority determines
are necessary for the completion of the Approved Project. Such potentially
eligible public safety services shall not include costs of police and fire
detail services incurred in connection with an Approved Project,
(f) Any funds expended by the Eligible
Applicant prior to the execution of a Project Funding Agreement, unless said
costs are costs approved by the Authority in writing related to a Feasibility
Study as approved by the Authority, shall be ineligible costs and are not
reimbursable by the Authority unless the Board votes to allow reimbursement of
such expenses incurred prior to the execution of the Project Funding
Agreement.
(g) All costs associated
with site acquisition.
(h)
Unsupported or inadequately supported project costs, as determined by the
Authority.
(i) Maintenance or
service contracts and warranties.
(j) Duplicate costs or costs unrelated to the
project.
(k) The lease, purchase or
rental of storage space, storage facilities, storage trailers, storage
containers, or other moving costs.
(l) Costs that are normal operating and
maintenance costs of the school district, as determined by the Authority, such
as textbooks, educational software, classroom supplies, custodial supplies,
administrative support, telephone service and other such operating costs.
(m) Swimming pools, skating rinks,
field houses (only to the same extent as gymnasia), district administrative
office space, indoor tennis courts, and other spaces which may be determined
ineligible by the Authority.
(n)
Penalties, processing fees, catalogue fees, sales tax, memberships, and
subscriptions.
(o) The costs
associated with local building permits, inspection fees, zoning fees,
conservation committee fees, public works fees. police and fire detail
services, and any other such fees.
(p) Athletic equipment, bases, balls, bats,
racquets, uniforms, helmets, gloves, and all other related equipment.
(q) All costs associated with the purchase,
lease, improvement, or maintenance of temporary modular units, unless such
costs are deemed by the Authority, in writing, prior to said purchase or lease,
to be the most cost effective option.
(r) All costs associated with the upgrades,
maintenance or improvements to swing spaces used for the housing of
students.
(s) All costs associated
with the transportation of students.
(t) All costs associated with the purchase,
lease or use of any vehicle, including but not limited to automobiles, trucks,
tractors, and golf carts.
(u) The
costs of any supplies related to the Assisted Facility.
(v) Demolition costs not approved by the
Authority in writing prior to said demolition.
(w) All costs associated with the abatement
or remediation of any contaminated soils, fuel storage tanks, or floor and
ceiling tiles.
(x) All costs
associated with utilities.
(y) All
costs associated with cell phone purchase or service.
(z) Dedication, ceremonial or celebratory
costs.
(aa) The Authority reserves
its right to disallow any costs associated with any change order that deviates
from the scope of the project, as determined by the Authority pursuant to the
Project Scope and Budget Agreement.
(bb) Any costs determined by the Authority to
be ineligible pursuant to M.G.L. c. 70B, St. 2004, c. 208, 963 CMR 2.00, the
MSBA Audit Guidelines, or any other policy, rule, or guideline of the
Authority.
Disclaimer: These regulations may not be the most recent version. Massachusetts may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.