Easthampton Fish Ladder Audit Report

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    RECOVERY OVERSIGHTADVISORYManhan Fish Passage

    November 2011Report No.: RO-C-FWS-068-2011

    ADVISORY

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    OFFICE OFINSPECTOR GENERALU.S.DEPARTMENT OF THE INTERIOR

    NOV 0 12011MemorandumTo: Rhea S. SuhAssistant Secretary, Policy, Management and BudgetThrough: Mary PletcherDeputy Director, National Business CenterFrom t f - 4 ~

    Assistant Inspector General for Recovery OversightSubject: Recovery Oversight Advisory - Manhan Fish PassageReport No . RO-C-FWS-068-2011

    This advisory regarding the Manhan Fish Passage is part of our ongoing efforts tooversee and ensure the accountability of funding appropriated to the U.S . Fish and WildlifeService (FWS) in the American Recovery and Reinvestment Act of 2009 (Recovery Act).Background

    On May 5, 2011 , we received a referral from the Recovery Accountability andTransparency Board (RA TB) concerning the FWS Manhan Fish Passage project in Easthampton,MA (city) . According to the 2010 "Finding ofNo Significant Impact for the EnvironmentalAssessment" of the project, " [t]he purpose of the Project is to enhance the ecological diversity ofthe Manhan River by restoring access to spawning and rearing habitat for migratory fishes .. . TheProposed Action [Project] involves the construction of a . . . fish ladder and downstream passagepipe at the Manhan River Dam in Easthampton, Massachusetts (city)."

    The RA TB referral involved a complaint alleging the project to be significantly overbudget, mismanaged, and misrepresented. Allegedly, the project budgeted $750,000 and claimedit would create 6.33 jobs; the budget has now increased 20 percent to $909,998, with noadditional jobs created. The discovery of unforeseen conditions at the dam after constructionbegan has hindered completion of the fish ladder and increased costs.In addition, the complainant alleged that the project interferes with the complainant'sproperty rights, that the recommended $107,000 in repairs to the dam have not been included inthe yearly capital plan, and that the public has heard little about the ongoing maintenance andrepair of the fish passage. Furthermore, the complainant believes that the dam may serve nopurpose.

    Recovery OverSght O ffice I W ash ington, DC

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    We reviewed the complaint by taking the following actions: reviewing the cooperativeagreement between FWS and the city, interviewing the complainant as well as FWS and cityofficials, and conducting a site visit of the project.

    Findings

    Complaint

    We found that while communications occurred sporadically among various city officials,and FWS staff, no one directly addressed all of the complainants concerns noted in his letter toRATB. On July 7, 2011, FWS sent a written response to the complainant, who claimed that theletter addressed only the completion date of the fish passage and the anticipated cost, rather thanall of his concerns.

    Project Status

    The unforeseen conditions discovered after site construction began involved a rock ledgeat the location of the ladder turnpool, and timbers in the river bed that prevented the installationof a coffer dam, which was needed to dewater the area where the fish ladder attaches to the dam.The latter condition could only be verified by divers conducting an underwater inspection, apractice not normally employed during the design phase of a project unless a question about siteconditions exists. The project is currently on hold, while the city seeks additional funds from theArmy Corps of Engineers (COE) and negotiates with COE to complete the project.

    Approximately $817,508 in Recovery Act funds are anticipated to be paid for work todate, which includes the assessment to determine the condition of the dam and the resultingrequired design changes. FWS expects to have approximately $92,490 remaining after all coststo date are realized, but will require additional funds to complete the project. FWS thinks fundswill be in place by fall of 2011.

    We are concerned that the remaining $92,490 obligated on the grant with the city may notbe expended in a timely fashion. Unless additional funds are applied to the project, obligatedfunds may not be used by September 30, 2015, the date by which obligated balances must beliquidated. Consideration may be given to whether these funds might be used in a timeliermanner on other FWS Recovery Act projects. If FWS chooses to apply these funds to otherRecovery Act projects, such actions must occur by December 31, 2012.

    COE estimates that it would cost $797,245 to complete the project. This amount includes$273,000 that the city has not paid to the COE for developing a Feasibility Study, 90 percent ofthe design plans, and an environmental assessment for the project. COE would contribute$425,591; the Fisheries program (another Federal program) would contribute $50,000; $92,490would come from the balance of FWS Recovery Act funds on the project; and $229,164 wouldcome from non-Federal sources. We are concerned about the appropriateness of using RecoveryAct funds to cover prior COE costs on the project.

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    In response to our draft report, FWS indicated a slight change in dollar figures resultingin a $5,400 (0.7 percent) reduction in total cost. FWS also stated that their intent was to use theremaining Recovery Act and Fisheries funds to complete a discreet portion of the project. Then,the agreement with FWS would be closed out, and the project would be completed by COE (withtechnical assistance provided by FWS) under an agreement with the city. This agreement

    depends on the city securing non-Federal funds for the project. FWS noted that no Recovery Actfunds would be used to cover prior COE costs.

    Project Design

    The unforeseen site conditions were not discovered during the design phase by thearchitect/engineering firm contracted by the city. FWS officials told us they expected that anintegral part of the structural design work by the firm would include reviewing all availableinformation on the composition of the dam, details of recent repairs, and the strength andfoundation of the concrete structure where the proposed fish passage would be anchored.According to FWS, if this had been done, the firm likely would have discovered discrepancies

    between two reports describing the dams composition, which would have led to further siteassessments. We found that one of these reports was prepared in 2006 by thearchitect/engineering firm, but it was not used during the design work.Required Reports

    We note that the quarterly report filed by the city for the first quarter of 2011onRecovery.gov does not accurately reflect the project status. The project is 60 percent expended,and yet the same Recovery.gov quarterly report indicates that the project is less than 50 percentcomplete. The city indicated that it incorrectly completed the quarterly report required under theRecovery Act for the first quarter of 2011, since it improperly reflected the percentage of workcompleted and did not include all subrecipients. The city corrected these omissions with the June30, 2011 report on Recovery.gov

    We also found that the city did not file the financial status report Standard Form 425 (SF-425) required by 43 C.F.R. 12.81(b)(3) under the cooperative agreement terms. The terms werealso inconsistent because one section required the SF-425 to be completed at the end of theproject, and another section required annual completion. FWS responded that the problem wascorrected when the city filed the required SF 425 on June 30, 2011. Because the cooperativeagreement was based on a bureau template, it is possible that SF-425s are not being filed on atimely basis by other recipients.

    Davis-Bacon Wage Rates

    Five categories appeared on the certified payrolls of the contractor originally hired by thecity to construct the project: Equipment Operator FM, Laborer, Carpenter, Operator, and LaborerForeman. These categories did not match the wage determination attached to the grantagreement. The certified payrolls indicated that, in addition [emphasis added] to the basichourly wage rate paid to each laborer or mechanic listed in the above referred payroll, paymentsof fringe benefits listed in the contract have been or will be made to the appropriate programs for

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    the benefit of said employees. The wage determination calls for power equipment operators toreceive Columbus Day as a paid holiday. We found that some of these employees worked onColumbus Day.

    When notified of these issues, the city responded that, No matter the category grouping,

    the workers were paid a rate higher than the highest Group Category CRC [constructioncontractor] allows its workers to work Columbus Day in exchange for a day off on the day afterThanksgiving. This exchange of the paid holiday for the day after Thanksgiving was notmentioned in section 4(c) of the certified payroll.

    Recommendations

    We recommend that FWS:

    1. Provide a more thorough response to the complainant about his concerns, including theissue of whether additional jobs were created by the additional funding.

    2. Determine if reallocating the remaining unexpended funds to other Recovery Act projectsis appropriate.

    3. Ensure that prior costs owed to COE will not be reimbursed with Recovery Act funds.4. Work with the city to determine if the unforeseen site conditions were due to an

    inadequate design process by the architect/engineering firm. If so, take appropriateaction.

    Please provide a written response to this advisory within 30 days of receipt detailing thecorrective actions that FWS will implement to meet our recommendations, as well as targetedcompletion dates and title(s) of the official(s) responsible for implementation. We will post thisadvisory on our Web site (www.doioig.gov/recovery/) and on Recovery.gov. Informationcontained in this advisory may also be included in our semiannual reports to Congress. Weperformed our work in accordance with the applicable Quality Standards for Inspection andEvaluation adopted by the Council of the Inspectors General on Integrity and Efficiency. Pleasecontact me if you have any questions.

    cc: Deputy Secretary, U.S. Department of the InteriorDirector, Office of Executive Secretariat and Regulatory AffairsDirector, Office of Acquisition and Property ManagementActing Director, Office of Financial ManagementDirector, U.S. Fish and Wildlife ServiceDepartmental GAO/ OIG Audit LiaisonAudit Liaison, Office of the SecretaryAudit Liaison, U.S. Fish & Wildlife ServiceRecovery Coordinator, U.S. Fish & Wildlife Service

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