UCI Reconciliation Billing Invoicing Yolanda Newton Local Assistance

UCI Reconciliation – Billing – Invoicing Yolanda Newton Local Assistance Division May 24, 2017

Agenda • Brief Overview of UCI and UCI Administrative UPC’s • Funding • UCI Reconciliation and VDOT Internal Audit Findings • UCI Worksheets • Life to Date Project Summary Schedule (Request for federal reimbursement) • UCI Year End Financial Summary • Tying It All Together 2

Overview of UCI and Administrative UPC’s • As each locality joined the Urban Construction Initiative (formerly First Cities) they assumed locally administered projects through a programmatic agreement • Some of these projects were already underway by VDOT • A UPC (project number) already existed in VDOT’s financial system • When a UCI locality assumed a project, expenditures for prior work performed by VDOT or the Locality was covered with existing allocations • Any remaining formula state funds were paid to the locality in quarterly payments • Each locality was made aware of the quarterly payments amount and amount of federal funds available for reimbursement • Most projects were funded mainly with Urban formula funds • Urban formula funds were split 80% federal; 18% state; 2% local match • This percentage split made billing and invoicing easy to track 3

Overview of UCI and Administrative UPC’s • An administrative UPC was established for each UCI UPC • The purpose of administrative UPC’s is to capture VDOT oversight charges to be billed to the locality • Eligible oversight charges can be found in Chapter 13 of the LAP Manual • The locality can request backup documentation to support billing • Each year VDOT oversight charges should be reviewed and localities and VDOT should be in agreement with oversight cost on each phase • VDOT oversight billings should never be a surprise to the locality • After the locality reimburses VDOT for oversight charges, they can in turn bill VDOT for those charges @ 80% if federal funds remain on the project 4

Funding • Urban formula funds were no longer programmed after 2009 • Other funds applied to UCI projects had different rules and the 80%-18%-2% percentage split may not apply • Localities have to account for the use of quarterly payments on the project life to date summary – federal reimbursement request form. The quarterly payments could be accounted for in the 18% and 2% local match on the form • Some federal funds included a soft match in which the non-federal share of a project’s cost could be matched through the use of toll credits • Localities did not have to account for state funds received from quarterly payments on the phase in which the soft match credit was applied • State funds included Revenue Sharing which requires a 50% local match • The various funds types applied to projects make tracking federal–local–state expenditures difficult to track. 5

UCI Reconciliation • Central Office – Local Assistance Review of UCI Projects • UCI and Administrative UPC’s were not properly used • Resulted in several over–reimbursement of federal funds to localities • Required VDOT to repay federal funds to FHWA • Required Localities to repay VDOT federal funds • Discovered project life to date summaries were not completed correctly • Did not properly account for use of federal, state and local funds • VDOT district signed off on incorrect “Life to Date Summaries/Invoices” • Appeared to internal auditors that state and local funds were not properly applied to projects • Local Assistance performing a review of all UCI UPC’s and their associated Administrative UPC to ensure proper use • Working with districts to review project activities • Local Assistance has been working with several districts to resolve issues 6

VDOT Internal Audit • In 2016 UCI projects underwent an audit by VDOT’s Assurance and Compliance Office (ACO) • ACO’s Findings: • • Basically the same as items already discovered by Local Assistance Division Localities did not properly account for the use of federal state and local funds Localities and VDOT personnel signed off on summaries that were completed incorrectly Localities were not signing off on the “project life to date summaries” In Addition • Due to how VDOT’s financial systems tracks expenditures and bills FHWA, it appeared localities were not properly using state funds paid in quarterly payments • Some VDOT offices were processing invoices under state activities instead of federal activities causing VDOT not to bill FHWA thus being not collecting federal funds already paid to localities 7

UCI Worksheet for Urban Formula Only Urban Construction Initiative (UCI) Project Funding Worksheet Project Number: Project Narrative Scope: Metropolis Boulevard From: To: 11/1/2005 Date UPC: AAAAA Locality: City of Hampton MP 0. 01 Locality Project Manager Contact info: Department Project Coordinator Contact Info: VDOT Contact Name and Number Project Estimates Preliminary Engineering Right of Way and Utilities Construction Total Estimated Cost Estimated Locality Project Expenses $20, 000 $100, 000 $350, 000 $470, 000 Estimated VDOT Project Expenses $1, 000 $2, 000 $5, 000 Estimated Total Project Costs $21, 000 $102, 000 $352, 000 $475, 000 Project Cost and Reimbursement Phase Estimated Project Costs from drop down box) Preliminary Engineering UCI Total PE $0 $0 $21, 000 Urban 20% $4, 200 $16, 800 $0 $0 $0 $4, 200 $16, 800 $21, 000 Right of Way & Utilities Total RW Construction Local Share Amount Local % Participation for Funds Type Funds type (Choose Maximum Estimated Reimbursement to Locality Reimbursement (Max. Reimbursement - Est. VDOT (Estimated Cost - Expenses) Local Share) $15, 800 $102, 000 Urban 20% $20, 400 $81, 600 0% $0 $0 $102, 000 $0 $81, 600 $79, 600 $319, 062 Urban 20% $63, 812 $255, 250 $32, 938 Local Funds $352, 000 $63, 812 $255, 250 $253, 250 $475, 000 $68, 012 $353, 650 $348, 650 Total CN Total Estimated Cost Total Maximum Reimbursement by VDOT to Locality (Less Local Share) $353, 650 Expenditures Prior to UCI Acceptance $0 Estimated Total Reimbursement by VDOT to Locality (Less Local Share and VDOT Expenses) $353, 650 Project Financing Urban Formula Federal $442, 062 Quarterly Payments $32, 938 Aggregate Allocations (A+B+C+D+E+F) $475, 000 Program and project Specific Funding Requirements ● The total expenditures prior to UCI particiption is $0 before UCI participation is $887, 488 ● The total expenditures as of 5/1/2017 is $ 34, 300 ● This is a limited funds project. The locality shall be responsible for any additional funding in excess of ● The total project balance is $ 319, 350 as of 5/12/2017 $353, 650 8

Life to Date Project Summary Federal Reimbursement Request Form DRAFT Life to Date Project Summary Schedule - Request to VDOT for Federal Reimbursement City Name Hampton Invoice Number Project ID/UPC# AAAAA/UPC 60104 Invoice Date Project Description Metropolis Boulevard Invoice Amount Federal Project ID# 5401538 Billing Period 121314 This invoice represents a cost to the City 11/28/2005 $ 12, 000. 00 10/1 -10/31/2005 Adjustment Amount Project to Date Request for Reimbursement Project to Date Collected Balance Outstanding $ - $ 10, 000. 00 $ - $ 15, 300. 00 $ - $ 20, 500. 00 $ - $ 32, 500. 00 $ 20, 500. 00 $ 12, 000. 00 80% Request Number Invoice Number 1 Invoice Date 1234 Invoice Amount Adjustment Date 7/31/2004 $ 10, 000. 00 2 5678 8/30/2004 $ 5, 300. 00 3 91011 10/30/2004 $ 7, 000. 00 4 121314 11/28/2004 $ 12, 000. 00 9/22/2004 $ (1, 800. 00) $ - Funding Summary Invoice Total Funding Summary Project Life to Date Total Phase Total Federal Dollars Requested State Dollars Applied Pre. Eng Right of Way Construction $ 12, 000. 00 $ 2, 700. 00 $ 300. 00 Total $ 12, 000. 00 $ 2, 700. 00 $ 300. 00 80% 18% of $15, 000 in which the locality can request 80% reimbursement of federal funds. $12, 000 represents 80% of the cost to the City. Local Match Applied 2% Total Project Expenditures Total Federal Dollars Requested Comments Amount not yet reimbursed to locality State Dollars Applied Local Match Applied Total Project Summary of all invoices Expenditures submitted indicating $ 10, 000. 00 $ 2, 250. 00 $ 12, 500. 00 $ 5, 300. 00 $ 1, 192. 50 $ 132. 50 $ 6, 625. 00 $ 15, 000. 00 $ 19, 000. 00 $ 4, 275. 00 $ 475. 00 $ 23, 750. 00 $ 15, 000. 00 $ 34, 300. 00 $ 7, 717. 50 $ 857. 50 $ 42, 875. 00 how federal-state-local dollars were applied to the project Total Cost *This scenario assumes all reimbursements requested of VDOT are eligible federally participating expenses and the Federal participation rate is equal to 80% on all phases of work and a 2% local match is required on this project Certification I certify that the above invoiced amounts are correctly calculated, the items being requested for payment have been used or installed on the project, and the costs are allowable per state and federal regulations. Documentation to support the invoiced amounts is attached. Finance Director or Designee Signature Director of Finance 9

UCI Worksheet Urban Construction Initiative (UCI) Project Funding Worksheet Project Number: Project Narrative Scope: Metropolis Boulevard From: To: 11/1/2005 Date UPC: AAAAA Locality: City of Hampton MP 0. 01 Locality Project Manager Contact info: Department Project Coordinator Contact Info: VDOT Contact Name and Number Project Estimates Preliminary Engineering Right of Way and Utilities Construction Total Estimated Cost Estimated Locality Project Expenses $20, 000 $100, 000 $350, 000 $470, 000 Estimated VDOT Project Expenses $1, 000 $2, 000 $5, 000 Estimated Total Project Costs $21, 000 $102, 000 $352, 000 $475, 000 Project Cost and Reimbursement Phase Estimated Project Costs drop down box) Preliminary Engineering UCI Total PE Right of Way & Utilities Total RW Construction Local Share Amount Local % Participation for Funds Type Funds type (Choose from Maximum Reimbursement Reimbursement (Estimated Cost - Local Requested to Date Share) Available for Reimbursment Estimated Reimbursement to Locality (Max. Reimbursement - Est. VDOT Expenses) $0 $0 $21, 000 Urban 20% $4, 200 $16, 800 $10, 000 $6, 800 $0 $0 $0 $21, 000 $4, 200 $16, 800 $15, 800 $102, 000 Urban 20% $20, 400 $81, 600 $53, 000 $28, 600 0% $0 $0 $0 $102, 000 $0 $81, 600 $79, 600 $8, 750 Urban 20% $1, 750 $7, 000 $0 $7, 000 $310, 312 Revenue Sharing 50% $310, 313 $0 $310, 313 $32, 938 Local Funds $352, 000 $312, 063 $317, 313 $315, 313 $316, 263 $415, 713 $410, 713 Total CN Total Estimated Cost $475, 000 $63, 000 $352, 713 Total Maximum Reimbursement by VDOT to Locality (Less Local Share) Expenditures Prior to UCI Acceptance $0 Estimated Total Reimbursement by VDOT to Locality (Less Local Share and VDOT Expenses) $415, 713 Project Financing Urban Formula Federal $131, 750 Revenue Sharing Local Match $155, 156 Quarterly Payments $32, 938 Aggregate Allocations (A+B+C+D+E+F) $475, 000 Program and project Specific Funding Requirements ● The total expenditures before UCI participation is $887, 488 prior to UCI particiption is $0 ● The total expenditures as of 5/1/2017 is $ 63, 000 ● This is a limited funds project. The locality shall be responsible for any additional funding in excess of ● The total project balance is $ 352, 713 as of 5/12/2017 $415, 713 10

Life to Date Project Summary Federal Reimbursement Request Form DRAFT Life to Date Project Summary Schedule - Request to VDOT for Federal Reimbursement City Name Project ID/UPC# Hampton AAAAA/UPC 60104 Invoice Number Invoice Date Project Description Federal Project ID# Metropolis Boulevard 5401538 Invoice Amount Billing Period 121314 This scenario assumes the same $15, 000 invoice but only $7, 000 11/28/2005 federal funds remain on the project and the city has to switch to 50% revenue sharing funds after the $7, 000 is used. The cost to the city $ 10, 125. 00 has increased and now can only request $10. 125 reimbursement. 10/1 -10/31/2005 Note - Revenue Sharing funds are not paid in quarterly payments so they have to be accounted for in the reimbursement request @ 50%. Request Number Invoice Amount Adjustment Date Adjustment Amount Invoice Number Invoice Date 1 1234 7/31/2004 $ 10, 000. 00 $ - 2 5678 8/30/2004 $ 5, 300. 00 $ - 3 91011 10/30/2004 $ 7, 000. 00 9/22/2004 $ (1, 800. 00) Project to Date Request for Reimbursement $ 10, 000. 00 $ 15, 300. 00 $ 20, 500. 00 Project to Date Collected $ 10, 000. 00 $ 15, 300. 00 $ 20, 500. 00 Balance Outstanding $ - 4 $ 30, 625. 00 $ 20, 500. 00 $ 10, 125. 00 121314 11/28/2004 $ 10, 125. 00 $ - Funding Summary Invoice Total Phase Pre. Eng Right of Way Construction (Rev. Sh) Total Federal Dollars Requested $ - Local Match Applied State Dollars Applied $ 3, 125. 00 $ 1, 575. 00 $ 4, 700. 00 Funding Summary Project Life to Date Total Project Expenditures Comments $ 6, 250. 00 Total Federal Dollars State Dollars Requested Applied $ 10, 000. 00 $ 2, 250. 00 $ 5, 300. 00 $ 1, 192. 50 $ - $ 3, 125. 00 Local Match Applied $ 250. 00 $ 132. 50 $ 3, 125. 00 Total Project Expenditures Summary of all invoices submitted $ 12, 500. 00 indicating how federal $ 6, 625. 00 state-local dollars were applied to the $ 6, 250. 00 $ 8, 750. 00 $ 15, 000. 00 $ 19, 000. 00 $ 34, 300. 00 $ 475. 00 $ 3, 982. 50 $ 23, 750. 00 $ 49, 125. 00 project Construction (Federal) $ 7, 000. 00 Total $ 7, 000. 00 $ 175. 00 $ 3, 300. 00 $ 4, 275. 00 $ 10, 842. 50 *This scenario assumes all reimbursements requested of VDOT are eligible federally participating expenses and the Federal participation rate is equal to 80% on all phases of work and a 2% local match is required on this project Certification I certify that the above invoiced amounts are correctly calculated, the items being requested for payment have been used or installed on the project, and the costs are allowable per state and federal regulations. Documentation to support the invoiced amounts is attached. Finance Director or Designee Signature Director of Finance 11

Year End Financial Summary DRAFT Annual Project Financial Status Report Locality Hampton For Fiscal Year Ended 6/30/2017 Project ID Project Status Estimated/Actual Completion Date Open 12/31/2022 AAAAA Total Federal Funding Applied Estimated/Actua Expenditures l Project Cost to Date State Funding Local Match Applied $ 475, 000. 00 $ 49, 125. 00 $ 34, 300. 00 $ 10, 842. 50 $ 3, 982. 50 Summary: Allocations through FY 17 $ 475, 000. 00 Plus Interest earned $ 9, 500. 00 Less: State Allocations Applied Through FY 17 $ (10, 842. 50) Balance Remaining $ 473, 657. 50 VDOT Fiscal Division 12

Tying It All Together • Local Assistance will continue to respond to ACO audit and work to resolve issues on project identified • • • While we have resolved several projects there a few more to resolve While this may sound bad OVERALL – THE PROGRAM IS WORKING LIKE IT SHOULD An updated worksheet will be provided to VDOT Project Coordinators • • ALL PROJECTS DO NOT HAVE NEGATIVE FINDINGS!! To make sure we are all in agreement, an updated worksheet is necessary 13

QUESTIONS 14