new jersey legislature...8. contract/program location various counties in new jersey 9. amount...

1

Firm Name:

Brown & Company CPAs and Management Consultants, PLLC

Engagement: EQ2014‐009‐P1‐HMFA For Quarter Ending: 09/30/2015

Reports required under A‐60 will be submitted by Integrity Monitors on the first business day of each calendar quarter to the State Treasurer and will contain detailed information on the projects/contracts/programs funded by the Disaster Relief Appropriations Act.

No. Recipient Data Elements Response Comments A.

General Info

1.

Recipient of funding

NJ Housing Mortgage and Finance Agency (NJHMFA)

2.

Federal Funding Agency? (e.g. HUD, FEMA)

HUD

3.

State Funding (if applicable) Not applicable

4.

Award Type HUD Community Development Block Grant (CDGB) - Disaster Recovery

5.

Award Amount $ 104,533,799

6. Contract/Program Person/Title Director, NJHMFA Division of Credit & Business Development

Quarterly Status Report Brown & Company CPAs and Ending September 30, 2015 2 Management Consultants, PLLC

No. Recipient Data Elements Response Comments

7. Brief Description, Purpose and Rationale of Project/Program

The Department of Treasury (Treasury), on behalf of the New Jersey Housing and Mortgage Finance Agency (NJHMFA) engaged Brown & Company CPAs and Management Consultants, PLLC (Brown & Company) pursuant to the “Prequalification Pools: Auditing and Other Related Services in Support of Disaster Recovery” contract (T2939) from prequalified contractors. The State retained the services of Brown & Company to provide a Program and Process Management Auditor to NJHMFA to audit the Fund for Restoration of Multi-Family Rental Housing (FRM) and associated contracts and the Sandy Special Needs Housing Fund (SSNHF) programs, for the purpose of minimizing risk and preventing or rectifying duplication of benefits, process and payment errors, waste, fraud, abuse, malfeasance and mismanagement of funds. The NJHMFA FRM program assists in the creation of rental projects in the nine most impacted New Jersey counties and provides the funding for forgivable subordinated mortgages. Those counties have been identified as Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union. The program awards subsidies in the form of loans to both not-for-profit and for-profit developers; owners capable of managing large multifamily housing developments; and low- and moderate-income households.

As of this report, NJHMFA has approved 16 loan contracts (Attachment A), each valued at $5 million or more.

8. Contract/Program Location Various counties in New Jersey

9. Amount Expended to Date $ 75,332,696

10. Amount Provided to other State or Local Entities

Not applicable

11. Completion Status of Contract or Program

72% of funds have been expended

12. Expected Contract End Date/Time Period

Funds should be expended by October 31, 2016.


No. Recipient Data Elements Response Comments B. Monitoring Activities

13. If FEMA funded, brief description

of the status of the project worksheet and its support.

Not applicable

14. Quarterly Activities/Project

Description (include number of visits to meet with recipient and sub recipient, including who you met with, and any site visits warranted to where work was completed)

No site visits were conducted during this reporting period; information was provided by email. Brown & Company contacted the Portfolio Supervisor, Credit and Business Development, NJHMFA and requested clarification on whether or not there is a due date to expend the grant funds. We requested the following: (1) the period(s) in which the grant funds must be expended for each contract and (2) the document(s) that state(s) the due date to expend funds. We received an update on the contracts from NJHMFA. Brown & Company reviewed the status of funds for the 16 contracts and noted that 2 contracts have not closed: Booker T. Washington Apts. and Keyport Legion Apts. The updated FRM-PHA report as of September 18, 2015 shows that two contracts—Booker T. Washington Apts. and Keyport Legion Apts.—have not yet closed, and 14 contracts have closed and drawn funds (see Attachment A).



15. Brief Description to confirm appropriate data/information has been provided by recipient and what activities have been taken to review in relation to the project/contract/program.

Brown & Company’s integrity oversight monitoring activity for the third quarter (July 1, 2015 – September 30, 2015) focused on Tasks C, D, and Task E.

Brown & Company reviewed the status of funds for the sixteen contracts and noted that two contract files were still outstanding from the last quarterly report. .

1. Booker T. Washington Apts. 2. Keyport Legion Apts.

We discussed the status of the two contracts with NJHMFA and was informed that the two contracts are expected to close soon. Heritage Village at Oakhurst closed during this quarter and there were two drawdowns to date. NJHMFA provided the schedule of drawdowns for Heritage Village at Oakhurst. We selected the drawdowns for testing and requested the following supporting documentation:

Invoice including evidence of approval Wire letter including required signatures NJHMFA’s MISTA accounting system transaction report.

We completed the testing and there were no exceptions noted.

16. Description of quarterly auditing activities that have been conducted to ensure procurement compliance with terms and conditions of the contracts and agreements.

Under Task D, Integrity Oversight Monitoring, Brown & Company tracked, tested, and reviewed contractor invoices submitted to NJHMFA. We reviewed updated schedules that reported activity.



17. Have payment requisitions in connection with the contract/program been reviewed? Please describe

Payment requisitions were reviewed. Brown & Company tracked, tested and reviewed contractor invoices submitted to NJHMFA for contracts that had drawn funds.

18. Description of quarterly activity to

prevent and detect waste, fraud and abuse.

The first essential step in preventing and detecting waste, fraud, and abuse in government programs is to review and evaluate the comprehensiveness and effectiveness of existing policies, procedures, and controls in place to manage and mitigate the risks inherent in government loan programs. Brown & Company’s monitoring activities this quarter included contract review and evaluation. We continued integrity monitoring and testing on contracts that closed and had funds expended. We tracked, tested, and reviewed contractor invoices submitted to NJHMFA.

19. Provide details of any integrity issues/findings

For the quarter July 1, 2015 – September 30, 2015, there were no findings.

20. Provide details of any work quality

or safety/environmental/historical preservation issue(s).

None

21. Provide details on any other items

of note that have occurred in the past quarter

None

22. Provide details of any actions taken to remediate waste, fraud and abuse noted in past quarters

Not applicable

C. Miscellaneous

23. Attach a list of hours and expenses incurred to perform your quarterly

See Attachment B


No. Recipient Data Elements Response Comments integrity monitoring review

24 Add any item, issue or comment not covered in previous sections but deemed pertinent to monitoring program.

None

Name of Integrity Monitor: Brown & Company CPAs and Management Consultants, PLLC

Name of Report Preparer: Gail Jenifer, CPA

Signature:

Date: January 4, 2016

Brown & Company CPAs and 7 Management Consultants, PLLC

ATTACHMENT A – APPROVED LOAN CONTRACTS VALUED AT $5MILLION OR MORE

The 16 loan contracts listed in the table below make up Brown & Company’s Task C Scope of Work. Contract Loan # Intended

Use of Funds

Amount Amount Expended to Date as of 9/18/2015

Date of Award

1 Heritage Village at Oakhurst

HMFA #2874

New $ 11,020,000 $ 1,422,965 10/3/2013

2 Franklin Manor HMFA #2885

New 10,118,157 7,174,139 12/3/2013

3 Willows at Waretown

HMFA #2599

New 9,097,970 9,097,970 10/3/2013

4 Booker T. Washington Apts.

HMFA #2927

Rehab 8,253,624 0 1/27/2014

5 The Beachview Residence

HMFA #2683

Rehab 5,642,518 5,642,518 11/14/2013

6 Heritage Village at Bloomfield

HMFA #2844

New 5,310,554 5,310,554 1/27/2014

7 Conifer Village at Rittenberg / Rittenberg Manor

HMFA #2704

New 5,412,163 5,412,163 1/27/2014

8 Carolina Crescent & Connecticut Crescent

HMFA #2859

New 5,145,721 5,145,721 1/27/2014

9 Green Heron Pointe (Railroad Avenue)

HMFA #2508

New 5,102,748 5,102,748 1/27/2014

10 Meadow Lark Run (Rio Grande)

HMFA #2837

New 5,086,261 5,086,261 1/27/2014

11 Egg Harbor Hotel Conversion

HMFA #2861

Rehab 5,549,899 5,549,899 5/25/2013

12 Westmont Station HMFA #2869

New 5,477,486 5,477,486 5/15/2013

13 Catherine Todd Senior Living Center

HMFA #2553

Rehab 5,692,775 5,692,775 5/15/2013

14 The Residences at Willow Pond Village (Delaney Homes)

HMFA #2878

New 5,840,000 3,433,574 5/15/2013

15 The Meadows (Atlantic City HOPE VI)

HMFA #2772

New 5,783,923 5,783,923 8/29/2013

16 Keyport Legion Apts.

Unknown Unknown 6,000,000 0 Unknown

Total $ 104,533,799 $ 75,332,696

Brown & Company CPAs and 8 Management Consultants, PLLC

ATTACHMENT B – Level of Effort and Expenses

Quarter ending September 30, 2015.

Hours Incurred For Quarterly Activities

Member 28

Manager 0

Supervisor 14

Seniors (3) 11

Total Hours 53

Expenses Incurred For Quarterly Activities

Travel $ 0

Other Direct Costs $ 0

State of New Jersey CliftonLarsonAllen ‐ DOT/DEP Route 35 Sandy ContractsDepartment of TreasuryIntegrity Monitoring Reporting ModelEngagement: Task Order #: DOT 1‐1A‐E; Contract # 88364For Quarter Ending: 9/30/2015

No. Recipient Data Elements Response CommentsA. General Info

1. Recipient of funding New Jersey Department of Transportation and New Jersey Department of Environmental Protection

2. Federal Funding Agency? (e.g. HUD, FEMA) FHWA and FEMA3. State Funding (if applicable) Yes4. Award Type FHWA and FEMA5. Award Amount Approximately $242 million excluding change orders6. Contract/Program Person/Title Ahmad Qureshi is the Project Manager for DOT projects and Erick Doyle is the Project Manager for

the DEP project7. Brief Description, Purpose and Rationale of Project/Program NJDOT and NJDEP received funding from the Federal Highway Administration (FHWA) and Federal

Emergency Management Agency (FEMA) for contracts in connection with damage caused by Superstorm Sandy. NJDOT procured the services to 3 contractors for 3 different projects for restoration repairs along Route 35. Those 3 contractors are Union Paving and Construction Company (DP 13130), George Harms Construction Company (DP 13120), and Agate Construction Company (DP 13114). NJDEP procured the services of EIC Associates to construct and install a four‐mile long steel seawall to help protect sections of Mantoloking, Brick and Route 35 from future natural disasters.

8. Contract/Program Location NJ Department of Transportation, Trenton NJ and NJ Department of Environmental Protection, Toms River, NJ

9. Amount Expended to Date All DOT projects as of 2/26/15 and including change orders: DP 13130 = approximately $75,012,200; DP 13120 = approximately $119,470,252; DP 13114 = approximately $43,253,192. NJDEP = approximately $22,896,000 as of July 2015.

10. Amount Provided to other State or Local Entities $0 11. Completion Status of Contract or Program DP 13130 substantially complete; DP 13120 approximately 87.5%; DP 13114 approximately 95%; EIC

approximately 98%12. Expected Contract End Date/Time Period DP 13130 ‐ punchlist stage and is substantially complete; DP 13120 ‐ per Resident Engineer, mid‐

January 2016; DP 13114 ‐ punchlist stage and is substantially complete; EIC substantially complete.B. Monitoring Activities

13. If FEMA funded, brief description of the status of the project worksheet and its support. For NJDEP's project, the project manager noted that the project is almost complete and about 98%

of the steel seawall is now covered in sand to help protect sections of Mantoloking, Brick and Route 35 from future natural disasters. There has been several walkthroughs and inspections and no issues or comments were noted. As for the NJ DOT projects, Per Project Manager for the DOT projects, DP 13130 is substantially complete and was noted that September is the estimated final completion date. For DP 13120, they are hoping to have the project substantially completed by the Fall of 2015. Significant delays were incurred during the summer months due to a stop order because of the high volume of visitors. As for DP 13114, this project is substantially complete.


Page 1 of 2

State of New Jersey CliftonLarsonAllen ‐ DOT/DEP Route 35 Sandy ContractsDepartment of TreasuryIntegrity Monitoring Reporting ModelEngagement: Task Order #: DOT 1‐1A‐E; Contract # 88364For Quarter Ending: 9/30/2015



14. Quarterly Activities/Project Description (include number of visits to meet with recipient and sub recipient, including who you met with, and any site visits warranted to where work was completed)

Met and spoke with the Project Manager for the DOT projects on 7/2/15 to discuss various internal controls and procedures retlated to the 3 projects we were contracted to monitor. Also met with procurement personnel to discuss the procurement process. Various discussions throughout this quarter with NJ DOT regarding the status of our requested items. It was also noted that there were numerous change orders for the 3 DOT projects. As of 2/26/15, we were notified of 15 changes orders approximating to $31 million for the George Harms Construction Company contract, 10 change orders approximating to $6 million for the Agate Construction Company contract, 10 change orders approximating to $9 million for the Union Paving and Construction Company contract. On 9/17/15, CLA met and spoke with NJ DOT in regards to the project expenditure details. NJ DOT provided the expenditure detail reports with a description and also provided a brief overview regarding the federal bill process. As for the NJ DEP project, CLA spoke with NJ DEP project manager and Hatch Mott MacDonald on various occassions to get an update on the DEP project and as to when we would be able to receive our requested documentation. No items were provided as of 9/30/15.


Management has been cooperative in making themselves available to help move our monitoring of the contracts.


No testing has occurred to date. Although our kick off meeting was January 23, 2015, there were several delays in regards to the contract and our official start date was pushed back to May 26, 2015. See item 14 in regards to the activities performed for this quarter.

17. Have payment requisitions in connection with the contract/program been reviewed? Please describe No, see item #16.

18. Description of quarterly activity to prevent and detect waste, fraud and abuse. N/A

19. Provide details of any integrity issues/findings None noted.20. Provide details of any work quality or safety/environmental/historical

preservation issue(s). None noted.21. Provide details on any other items of note that have occurred in the past

quarter None noted.22. Provide details of any actions taken to remediate waste, fraud and abuse

noted in past quarters None noted.C. Miscellaneous

23. Attach a list of hours and expenses incurred to perform your quarterly integrity monitoring review SEE ATTACHMENT ‐ NEXT TAB IN SPREADSHEET

24 Add any item, issue or comment not covered in previous sections but deemed pertinent to monitoring program. N/A

Name of Integrity Monitor: CliftonLarsonAllen LLPName of Report Preparer: Gregory J. Bussink, III, Principal

Signature:Date: 1/4/2016

Page 2 of 2

State of New JerseyDepartment of TreasuryIntegrity Monitoring Reporting ModelEngagement: Task Order #: DOT 1‐1A‐E; Contract # 88364For Quarter Ending: 9/30/2015

HOURSPrincipal 15.25 Program manager 77.40 Project manager 83.00 Associate/staff 11.00

Total Hours 186.65

State of New Jersey CliftonLarsonAllen ‐ NJ Economic Development AuthorityDepartment of TreasuryIntegrity Monitoring Reporting ModelEngagement: EQ2014‐003‐P1Quarter ended 9/30/2015


1. Recipient of funding NJ Economic Development Authority (NJ EDA)2. Federal Funding Agency? (e.g. HUD, FEMA) HUD HUD award to State of NJ, State of NJ awarded to NJ DCA as a

subrecipient.3. State Funding (if applicable) n/a4. Award Type CDBG‐DR5. Award Amount $9 million6. Contract/Program Person/Title Fred Cole, Senior VP Operations for NJ EDA Mr. Cole acts as the State Contract Manager in relation to the

administration of the PFM contract.7. Brief Description, Purpose and Rationale of Project/Program EDA is a subrecipient of DCA and is responsible for the administration of

$300 million in funding for economic revitalization through grants or loans to small businesses. EDA procured the services of PFM to administer the grant/loan program.

8. Contract/Program Location Economic Development Authority, Trenton NJ9. Amount Expended to Date $6,929,523 10. Amount Provided to other State or Local Entities $0 11. Completion Status of Contract or Program Ongoing12. Expected Contract End Date/Time Period 11/30/2015B. Monitoring Activities

13. If FEMA funded, brief description of the status of the project worksheet and its support.

N/A


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Performed testing offsite at CLA offices for the quarter ending 9/30/15. Testing of invoices including the additional September clarification invoice, the June 2014 invoice and clarification invoice, the initial April 2014 invoice and the 90% retainage release invoices. Performed ongoing integrity monitoring services, which included review of invoices/payments and follow‐up questions/resolution. We review the invoices submitted to DCA and provide any observations and recommendations for improvement to help ensure compliance with relevant regulations/guidelines. The Program Manager then incorporates these comments/suggestions into a revised invoice if necessary. Three Invoices submitted in September were recalled by DCA to be reformatted. The Program Manager formatted them accordingly and resubmitted for review. These invoices are subject to Amendment 1 and 2.


Management has been cooperative in providing appropriate data/information to perform our monitoring of the contract.


Testing of selected invoices and payments through the end of the quarter for compliance with the contract and relevant regulations/guidelines.

17. Have payment requisitions in connection with the contract/program been reviewed? Please describe Yes, as noted above in item #16.

18. Description of quarterly activity to prevent and detect waste, fraud and abuse.

Testing of procurement process and invoices as noted above. Interviews with EDA staff.

19. Provide details of any integrity issues/findings No significant findings have been noted. 20. Provide details of any work quality or safety/environmental/historical

preservation issue(s). None noted.21. Provide details on any other items of note that have occurred in the past

quarter Nothing to note that has not already been stated elsewhere.22. Provide details of any actions taken to remediate waste, fraud and abuse

noted in past quarters not applicable ‐ no issues noted in previous quarters.C. Miscellaneous

23. Attach a list of hours and expenses incurred to perform your quarterly integrity monitoring review SEE ATTACHMENT ‐ NEXT TAB IN SPREADSHEET

24 Add any item, issue or comment not covered in previous sections but deemed pertinent to monitoring program. N/A

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Name of Integrity Monitor: CliftonLarsonAllen LLPName of Report Preparer: Gregory J. Bussink, III, Principal

Signature:Date: 1/4/2016

Page 3 of 3

State of New JerseyDepartment of TreasuryIntegrity Monitoring Reporting ModelEngagement: EQ2014‐003‐P1For Quarter Ending: 9/30/2015

HOURSPrincipal 9.75 Program manager 3.00 Project manager 87.75 Associate/staff -

Total Hours 100.50

Sumbitted by CliftonLarsonAllen LLP - 1/4/16 along with our quarterly status report

State of New Jersey

Department of the Treasury

Integrity Oversight Monitoring Reporting Model

Firm Name: Grant Thornton LLPEngagement: PVSC Integrity Oversight Monitor EQ2015-001-PS

For Quarter Ending: 09/30/2015


A. General Info

1. Recipient of funding Passaic Valley Sewerage Commission (PVSC)2. Federal Funding Agency? (e.g. HUD, FEMA) FEMA3. State Funding (if applicable) N/A4. Award Type FEMA 406 Restoration and 406 Mitigation Funding5. Award Amount $444.8 million6. Contract/Program Person/Title E. David Barth, Grant Thornton Project Manager7. Brief Description, Purpose and Rationale of Project/Program Passaic Valley Sewerage Commission has received federal FEMA funding

in the amount $444.8 million through 48 different Project Worksheets

(PW). The scope of Grant Thornton's work is limited to 12 specific

contracts whose value exceeds $5 million. As of September 30, 2015 only

three contracts exceeded the integrity montioring threshold: 1)

Temporary By-Pass Cabling - Travis Contract; 2) Administration Controls

Building - Fine Wall Contract; and 3) Program Management Services -

AECOM/HDR Contract

8. Contract/Program Location PVSC, 600 Wilson Avenue, Newark, NJ9. Amount Expended to Date As of September 30, 2015 the following expenditures (associated with the

three contracts) have been made 1) Travis - $12,675,900; 2) Fine Wall -

$0; AECOM/HDR - $668,034

10. Amount Provided to other State or Local Entities $0 11. Completion Status of Contract or Program The Completion Status for each of the three contracts, currently subject

to our review, is as follows: 1) Travis - Ongoing Time & Material Contract

with an anticipated end date of December 31, 2015 or until a

replacement contract is awarded. 2) Fine Wall - This construction project

was advertised on March 4, 2015 and awarded on June 4, 2015. PVSC

issued the Notice to Proceed on September 14, 2015. 3) AECOM/HDR

was awarded the Program Management Services contract on February

13, 2015. The initial contract period is for two years.

12. Expected Contract End Date/Time Period The expected contract end dates for the three contract currently subject

to our review are as follows: 1) Travis - December 31, 2015 or until a

replacement contract is executed, 2) Fine Wall - September 13, 2016; 3)

AECOM/HDR - February 13, 2017

B. Monitoring Activities

Reports required under A-60 will be submitted by Integrity Monitors on the first business day of each calendar quarter to the State Treasurer and will contain detailed information on the projects/contracts/programs funded by

the Disaster Relief Appropriations Act.

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State of New Jersey








13. If FEMA funded, brief description of the status of the project worksheet

and its support.

Of the three projects currently being monitored, funding is provided

through two Project Worksheets (PW). The Travis and Program

Management Services contracts are funded through PW 4701 for the

Repair and/or Restoration of the PVSC's Power Substations and Electric

Cables. The Fine Wall contract is funded thorugh PW 4803 for the Repair

and/or Restoration of the Administration Controls Building. In addition

to the specific work of these contracts, the PWs also fund other work not

currently part of our review either because the contract values are less

than the $5 million threshold or the proposed projects have not been

initiated.

14. Quarterly Activities/Project Description (include number of visits to meet

with recipient and sub recipient, including who you met with, and any

site visits warranted to where work was completed)

Grant Thornton's activities during this quarter included the engagement's

Kick-Off Meeting with Treasury staff and PVSC; review of the PVSC

administrative and financial processes and initiating the review of PVSC

procurement processes. Grant Thornton delivered to Treasury the

Memorandum of Record for the Kick-Off Meeting and to PVSC our

Administrative and Financial Process Review analysis. In order to

complete the above reviews Grant Thornton met with PVSC on the

following dates: July 8, 2015 - Kick-Off Meeting - PVSC's Executive

Director, General Counsel, Chief Financial Officer, Purchasing Agent, and

Chief Engineer; August 3, 2015 - PVSC's Purchasing Agent, Chief Financial

Offer and Chief Engineer; August 24, 2015 - PVSC's General Counsel,

Purchasing Agent, Chief Financial Offer and Chief Engineer; August 27,

2015 -PVSC's General Counsel; September 10, 2015 - PVSC's Chief

Engineer; September 22, 2015 - PVSC's FEMA liason; September 28, 2015 -

PVSC's General Counsel. In addition Grant Thornton has attended PVSC's

Bi-Weekly FEMA Coordination meetings with FEMA, NJOEM, NJDEP,

AECOM-HDR, PS&S and PVSC staff.

15. Brief Description to confirm appropriate data/information has been

provided by recipient and what activities have been taken to review in

relation to the project/contract/program.

PVSC provided to Grant Thornton copies of Bid Notices, Invitation to Bid

(ITB), Requests for Qualification, Requests for Proposals, copies of related

vendor proposals, copies of the vendors contracts, copies of the vendors'

proposal disclosures, certification and statements. With this information

Grant Thornton was able to confirm PVSC's compliance with FEMA

and/or State administrative grant requirements and processes.

16. Description of quarterly auditing activities that have been conducted to

ensure procurement compliance with terms and conditions of the

contracts and agreements.

During this period Grant Thornton began the review of PVSC

contracting/procurement processes related to the three contracts subject

to our review.

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State of New Jersey








17. Have payment requisitions in connection with the contract/program been

reviewed? Please describe

No. During this first quarter of our engagement, Grant Thornton's tasks

focused on PVSC's administrative, financial and procurement processes.

Our review during the quarter did not include payment reviews.

18. Description of quarterly activity to prevent and detect waste, fraud and

abuse.

During this first quarterly period Grant Thornton had not begun its

integrity monitoring tasks

19. Provide details of any integrity issues/findings None noted

20. Provide details of any work quality or safety/environmental/historical

preservation issue(s).

During this first quarterly period Grant Thornton provided limited

construction oversight. We did not observe any work quality, health and

safety, environmental or historical preservation issues

21. Provide details on any other items of note that have occurred in the past

quarter

PVSC has provided Grant Thronton access to its procurement, financial

and administrative files necessary to complete our reviews.

22. Provide details of any actions taken to remediate waste, fraud and abuse

noted in past quarters

N/A

C. Miscellaneous

23. Attach a list of hours and expenses incurred to perform your quarterly

integrity monitoring review

See Attached Time and Expense Report. During the quarter Grant

Thornton provided a total of 438.75 hours for a cost of $78,742.33

24 Add any item, issue or comment not covered in previous sections but

deemed pertinent to monitoring program.

Based on our review of PVSC’s financial and administrative processes, we

concluded that PVSC’s processes are appropriate for complying with

FEMA grant management requirements and NJOEM standards. PVSC’s

financial and administrative processes provide the framework for

ensuring that the functions adhere to grant program guidelines,

procurement rules and reporting requirements. Proper controls appear

to be in place to minimize the risk of deobligation of federal funds;

duplication of benefits; process and payment errors; and waste, fraud

and abuse. We did discuss however, two area where PVSC could

strengthen its controls relative to its administrative processes dealing

with business disclosures by members of a procurement's Evaluation

Team (in addition to the annual Ethics Disclosure); and the inclusion of

bid protest procedures in its bidding documents.

PVSC’s financial and administrative processes provide the framework for ensuring that the functions adhere to grant program guidelines, procurement rules and reporting requirements. Proper controls appear to be in place to minimize the risk of deobligation of federal funds; duplication of benefits; process and payment errors; and waste, fraud and abuse.

Name of Integrity Monitor: Grant Thornton LLP

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State of New Jersey








Name of Report Preparer: Jack Reagan

Signature:

Date: 4-Jan-16

Page 4 of 4

PVSC Integrity Monitor - Time and Expense Report

Hours Subtotal Hours Labor Travel Total

Project Name - ID: PVSC Kick-Off Mtg Task A / 100233.00.00A.00A 30.00 30.00 5,462.14$ 313.29$ 5,775.43$

Project Name - ID: PVSC Fin&AdminRevw Task B / 100233.00.00B.00B 193.75 193.75 33,606.92$ 3,125.26$ 36,732.18$

Project Name - ID: PVSC Travis Tsk C / 100233.00.001.01C 80.00

Project Name - ID: PVSC Travis Tsk D / 100233.00.001.01D 5.00

Project Name - ID: PVSC Travis Tsk E / 100233.00.001.01E 4.35

Project Name - ID: PVSC Travis Tsk F / 100233.00.001.01F 4.50 93.85 14,300.92$ 137.24$ 14,438.16$

Project Name - ID: PVSC Fine Wall Tsk C / 100233.00.002.01C 24.00

Project Name - ID: PVSC Fine Wall Tsk D / 100233.00.002.01D 9.50

Project Name - ID: PVSC Fine Wall Tsk E / 100233.00.002.01E 7.35

Project Name - ID: PVSC Fine Wall Tsk F / 100233.00.002.01F 3.75 44.60 7,842.65$ 112.44$ 7,955.09$

Project Name - ID: PVSC AECOM/HDR Tsk C / 100233.00.003.01C 45.50

Project Name - ID: PVSC AECOM/HDR Tsk D / 100233.00.003.01D 1.25

Project Name - ID: PVSC AECOM/HDR Tsk E / 100233.00.003.01E 4.35

Project Name - ID: PVSC AECOM/HDR Tsk F / 100233.00.003.01F 4.50 55.60 9,979.41$ 112.44$ 10,091.85$

Project Name - ID: PVSC Floodwall Eng Tsk E / 100233.00.004.01E 2.25

Project Name - ID: PVSC Floodwall Eng Tsk F / 100233.00.004.01F 0.25 2.50 445.40$ -$ 445.40$

Project Name - ID: PVSC Floodwall Const TskE / 100233.00.005.01E 2.25

Project Name - ID: PVSC Floodwall Const TskF / 100233.00.005.01F 0.25 2.50 445.40$ -$ 445.40$

Project Name - ID: PVSC Power Gen Eng Tsk E / 100233.00.006.01E 2.25

Project Name - ID: PVSC Power Gen Eng Tsk F / 100233.00.006.01F 0.25 2.50 445.40$ -$ 445.40$

Project Name - ID: PVSC Power Gen Const TskE / 100233.00.007.01E 2.25

Project Name - ID: PVSC Power Gen Const TskF / 100233.00.007.01F 0.25 2.50 445.40$ -$ 445.40$

Project Name - ID: PVSC Phase 2 RepairsTsk C / 100233.00.008.01C 1.00

Project Name - ID: PVSC Phase 2 RepairsTsk E / 100233.00.008.01E 1.35

Project Name - ID: PVSC Phase 2 RepairsTsk F / 100233.00.008.01F 1.00 3.35 601.13$ -$ 601.13$

Project Name - ID: PVSC Motor Controls Tsk E / 100233.00.009.01E 2.25

Project Name - ID: PVSC Motor Controls Tsk F / 100233.00.009.01F 0.25 2.50 449.69$ -$ 449.69$

Project Name - ID: PVSC Mtr/PmpRepairs Tsk C / 100233.00.010.01C 2.50

Project Name - ID: PVSC Mtr/PmpRepairs Tsk E / 100233.00.010.01E 1.60

Project Name - ID: PVSC Mtr/PmpRepairs Tsk F / 100233.00.010.01F 0.75 4.85 868.37$ -$ 868.37$

Project Name - ID: PVSC PAC Motors Elec TskE / 100233.00.011.01E 0.25 0.25 48.83$ -$ 48.83$

Overall 438.75 438.75 74,941.66$ 3,800.67$ 78,742.33$

PVSC Integrity Monitor - Legislative Quarterly Report

July 2015 - September 2015

State of New JerseyDepartment of TreasuryIntegrity Monitor ReportMiddlesex County Utility Authority ‐ Pumping Stations Contract # T‐2939; EQ2014‐004‐P2&P3For Quarter Ending: 9/30/2015

The reporting period for this report is July 1, 2015 through September 30, 2015


A. General Info1. Recipient of funding Middlesex County Utility Authority (MCUA)

2. Federal Funding Agency? (e.g. HUD, FEMA)

FEMA

3. State Funding (if applicable) Not Applicable

4. Award Type Grant

5. Award Amount Cruz Contractors, LLC (Cruz) ‐ $9,593,000Allied Construction Group, Inc. (Allied) ‐ $8,038,156Total ‐ $17,631,156Sayreville and Edison Pumping Stations Mitigation Contracts ‐ TBD (2016)

6. Contract/Program Person/Title

Standby Contract for Forced Mains and Gravity Sewers ‐ CruzRehabilitation and Upgrade of the Sayreville Pumping Station ‐ AlliedFuture mitigation work on Sayreville and Edison Pumping Stations ‐ Contracts anticipated to be procured in mid‐2016Program Person: Richard Fitamant, Executive Director

Under Section A‐60, this report must be submitted by Integrity Monitors on the first business day of each calendar quarter to the State Treasurer and will contain detailed information on the projects/contracts/programs funded by the Disaster Relief Appropriations Act.

During the ongoing incident period of Post Super Storm Sandy, beginning on October 26, 2012, the Middlesex County Utilities Authority (MCUA) suffered substantial damage to its Sayreville Pump Station which utilizes six (6)‐50 MGD (Million Gallons Daily) pumps and four (4)‐40 MGD pumps to pump anywhere from 70 MGD of dry weather sanitary flow to 300 MGD of wet weather sanitary flow from 30 municipalities in Middlesex and Somerset counties to the central treatment plant. The storm surge inundated and damaged its onsite electrical substation and controls. Also, due to salt water intrusion the pumps, pump fittings, and pump motors were compromised and rendered inoperable. These damages prompted the sub‐grantee to immediately secure emergency contracts to prevent further damage to the existing infrastructure and prevent raw sewage from being discharged into the waterways.

Prior to Super Storm Sandy, Cruz was issued a standby contract for forced mains and gravity sewers which included provisions for dewatering and by‐pass pumping. This standby contractor was utilized after Super Storm Sandy to perform emergency clean‐up and restoration activities for both the original Sayreville Pumping Station and the Sayreville Relief Pumping Station resulting from storm damage.

In June 2011, Allied was contracted to perform the rehabilitation and upgrade of the Sayreville Pumping Station. This contract has a provision for unforeseen circumstances which allows payment for any items that are above and beyond the original contract. In this case, the dewatering of the facility, emergency site preparation, and temporary repairs to electrical systems were not in the original contract but were addressed as change orders following the storm.

On March 27, 2013, the Integrity Oversight Monitor Act (“the Act”) was enacted for the purpose of authorizing the deployment of Integrity Oversight Monitors for recovery and rebuilding contracts resulting from Super Storm Sandy and subsequent major storms in New Jersey. The Act authorizes the State Treasurer to require integrity oversight monitor services on any State or non‐State, federally funded, recovery and rebuilding contract of $5 million or more.

KPMG LLP (“KPMG”) was engaged by the Department of Treasury (“DOT”) on June 20, 2014 to serve as the Integrity Oversight Monitor (“IM”) for MCUA Sayreville Pumping Station given that both Cruz and Allied's contracts which exceeded the $5 million threshold required by the Act.

Currently, MCUA is in the process of finalizing the design and obtaining approval for permanent mitigation projects on Sayreville Pumping Station and Edison Pumping Station.

Brief Description, Purpose and Rationale of Project/Program

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KPMG - Middlesex County Utility Authority

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8. Contract/Program Location Middlesex County Utility Authority2571 Main Street Sayreville, NJ 08872

9. Amount Expended to Date Cruz Contractors, LLC ‐ Task 1 (Bypass Systems to CTP): $7,498,901.27 Task 2 (HSR Temporary Wet Weather Overflow Facilities): $1,670,176.15

Allied Construction Group, Inc. ‐ $8,281,546.39Total ‐ $17,450,624


Not Applicable

11. Completion Status of Contract or Program

Emergency Work for Sayreville Pumping Station‐ 100% Complete.Sayreville and Edison Pumping Stations Hazard Mitigation Projects ‐ Design and Approval Stage In progress

12. Expected Contract End Date/Time Period

Cruz Contractors, LLC ‐ 4/30/15Allied Construction Group, Inc. ‐ 4/30/15Sayreville and Edison Pumping Stations Mitigation Work ‐ 2018

B. Monitoring Activities13. If FEMA funded, brief

description of the status of the project worksheet and its support.

The following Project Worksheets were compiled and submitted to FEMA for both emergency and permanent repairs on the Sayreville Pumping Station. All Project Worksheets were prepared and reviewed by MCUA Executive Director, MCUA's Owner's representative (R3M), and FEMA specialists: ‐ PA‐02‐NJ‐4086‐PW‐5061: Sayreville Pump Station Permanent Repairs, $12,002,019 ‐ Complete‐ PA‐02‐NJ‐4086‐PW‐5061: Sayreville Pump Station Permanent Repairs, $61,659,218 ‐ Hazard Mitigation Proposals (HMP)‐ PA‐02‐NJ‐4086‐PW‐00033: Temporary By‐Pass Pumping, $5,673,000 ‐ Complete ‐ PA‐02‐NJ‐4086‐PW‐05032: Sayreville Pump Station Emergency Repairs, $2,250,097 ‐ Complete‐ PA‐02‐NJ‐4086‐PW‐00045: Temporary Deflection Pumps, $1,736,612 ‐ Complete ‐ PA‐02‐NJ‐4086‐PW‐04905: Acoustic Fiber Optic Monitoring System, $803,853 ‐ Complete

‐PA‐02‐NJ‐4086‐PW5075: This HMP includes the construction of a floodwall surrounding the Edison Pump Station, the construction of an isolation vault with a bypass pumping system, and the construction of a riser ring to elevate the Northwest Access Shaft & Tunnel top slab above the design 500‐year flood elevation, $15,760,972 ‐ Design in progress.

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KPMG issued a detailed document request list on July 10, 2014 which outlined all documentation to be provided to KPMG as part of the review. Throughout this review, KPMG prepared an inventory and assessment of documentation provided by MCUA, R3M, contractors and their subcontractors. In addition, KPMG drafted a detailed project work plan that clearly outlined the areas of our review and included detailed test steps to complete our analysis.

This quarter KPMG reviewed Front End documentation regarding the permanent restoration and mitigation work on the Sayreville Pump Station and the Edison Pump Station.


In the previous quarters, KPMG performed a detailed assessment of the procurement process in order to monitor and assess if contracts with Allied and Cruz were procured in accordance with program requirements.

This quarter, KPMG reviewed Front End documentation regarding future permanent restoration and mitigation work on the Sayreville Pump Station and the Edison Pump Station. As part of this review, KPMG reviewed the contract language surrounding procurement. To the extent there are findings, KPMG will present any recommendations made to MCUA and R3M in future quarterly reports.


This quarter, KPMG reviewed Front End documentation regarding future permanent restoration and mitigation work on the Sayreville Pump Station and the Edison Pump Station. KPMG will present any recommendations made to MCUA and R3M in future quarterly reports.

14. 1) On July 22, 2015, KPMG conducted a phone call with R3M Engineering to discuss status of next phase of MCUA mitigation work and timeline for KPMG involvement.

2) On July 28, 2015, KPMG received Front End Documentation from Hatch Mott MacDonald at the request of R3M.

3) On August 10, 2015, KPMG began preliminary review of Front End Documentation provided by Hatch Mott MacDonald.

4) On August 19, 2015, KPMG contacted R3M to coordinate scheduling a meeting with MCUA to discuss Front End Documentation which included contracts and specifications.

5) During September 2015, KPMG continued the review of Front End Documentation, noting areas to discuss with R3M and MCUA. Some topics to discuss include: contract language improvements, supporting documentation requirements, and daily sign in/sign out logs criteria.

Quarterly Activities/Project Description (include number of visits to meet with recipient and sub recipient, including who you met with, and any site visits warranted to where work was completed)

Yes. Payment requisitions were reviewed during the previous quarters. Specifically, KPMG performed a high‐level review of all payment applications for both Cruz and Allied. As part of this high‐level review, KPMG assessed whether all payment applications were reviewed and approved by the appropriate personnel, the work performed was within the project scope and billings were compliance with the contract terms and program requirements. In addition, KPMG performed an in depth review of a sample of payment applications.

KPMG did not review any new payment requisitions this quarter.

Have payment requisitions in connection with the contract/program been reviewed? Please describe

17.

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19. Provide details of any integrity issues/findings No noted issues this quarter.

20. Provide details of any work quality or safety/environmental/historical preservation issue(s).

No noted issues this quarter.

21. Provide details on any other items of note that have occurred in the past quarter

No other items to note this quarter.

C. Miscellaneous

23. Attach a list of hours and expenses incurred to perform your quarterly integrity monitoring review

Attached. See July‐September 2015 Time & Expense Summary Tab.


None.

Name of Integrity Monitor: KPMG

Name of Report Preparer: Timothy Hedley

Signature:

Date: 1/4/2016

No actions necessary this quarter.Provide details of any actions taken to remediate waste, fraud and abuse noted in past quarters

22.

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Resource Hours Incurred (July ‐September)

Tim Hedley 0.00Raymond Dookhie 0.50Ryan Coco 4.00Nicolas Koniski 0.00John Christensen 2.00Emily Wong 1.25Grand Total 7.75

Time Summary

Jul-Sept Time&Expense Summary

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State of New JerseyDepartment of TreasuryIntegrity Oversight Monitoring Reporting Model

Firm Name: Navigant Consulting Inc.Engagement: EQ2014-002-P3-DCA Sandy Contracts


No. Recipient Data Elements Response CommentsGeneral Info1. Recipient of Funding The New Jersey Department of Community Affairs ("DCA"), Sandy Recovery Division ("SRD"), is the direct recipient of funding from the United States

Department of Housing and Urban Development ("HUD"), Community Development Block Grant, Disaster Recovery Program ("CDBG-DR") to address the massive property damage inflicted by Superstorm Sandy. DCA retained several contractors, who fall under the purview of the New Jersey Integrity Oversight Monitor Act ("A-60"), to assist it in managing various programs designed to distribute CDBG-DR funds to eligible New Jersey residents and businesses. These Contractors include the Gilbane Building Company ("Gilbane"), CB&I Shaw ("CB&I"), and the URS Group, which were retained to manage the Rehabilitation, Reconstruction, Elevation and Mitigation Program ("RREM"); Gilbane, which was retained to manage the Landlord Rental Repair Program ("LRRP"); CGI Federal ("CGI"), which was retained to create and manage the Sandy Integrated Recovery Operations and Management System ("SIROMS"), an information technology solution to assist DCA in managing its SRD programs; Hammerman & Gainer ("HGI"), which was retained to manage the housing application process for the SRD's various housing programs; ICF, Inc., which was retained to provide subject matter expertise and staffing augmentation services to DCA; and Cohn Reznick, which was retained to serve as DCA's internal integrity monitor.

2. Federal Funding Agency? (e.g. HUD, FEMA) HUD

3. State Funding (if applicable) None4. Award Type HUD CDBG-DR Award

5. Award Amount Gilbane (RREM): $54,606,950; Gilbane (LRRP): $10,811,324CB&I/Shaw: $86,057,625CGI: $65,698,399ICF: $74,134,279URS: $20,096,853HGI: $67,739,989Cohn Reznick: $9,992,683

Reports required under A-60 will be submitted by Integrity Monitors on the first business day of each calendar quarter to the State Treasurer and will contain detailed information on the projects/contracts/programs funded by the Disaster Relief Appropriations Act.

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6. Contract/Program Person/Title RREM and LRRP: Stephen Grady, Assistant Director, Housing Recovery Programs, DCASIROMS and Sandy Grant Manager Module ("SGM"): Linda Torres, Contract Manager, DCA Information Technology DirectorICF: Elizabeth Mackay, Assistant Division Director, DCA Sandy Recovery DivisionCohn Reznick: Robert Bartolone, Director, Office of Auditing, DCA

7. Brief Description, Purpose and Rationale of Project/Program

RREM provides CDBG-DR awards of up to $150,000 to eligible homeowners to restore homes damaged by Superstorm Sandy.LRRP provides CDBG-DR awards of up to $50,000 per unit to owners of rental properties with between 1 and 25 units that require rehabilitation as a result of Superstorm Sandy.SIROMS, developed and administered by CGI, manages all of DCA’s Superstorm Sandy funding requests from State agencies, local governments and school districts, as well as all HUD reporting obligations. SGM, a grant tracking system, was developed by CGI. It has replaced the eGrant system developed by HGI.ICF provides strategic advice, program implementation, subject matter expertise and staff augmentation services to DCA.Superstorm Sandy Housing Incentive Program ("SSHIP") covered the completion and processing of housing program applications, and the determination of eligibility and disbursement of funds under the Resettlement Incentive Program, and the RREM and LRRP Programs. HGI was the original contractor selected to manage SSHIP, but prior to the beginning of Navigant's monitorship, DCA and HGI, by mutual agreement, terminated HGI's role as the SSHIP contractor. HGI's performance under the contract is currently the subject of an arbitration proceeding. The New Jersey Attorney General's Office represents the State in that proceeding. DCA assumed responsibility over HGI's duties at the Superstorm Sandy Housing Recovery Centers, and CGI assumed responsibility for migrating applicant data from HGI's eGrants system to CGI's SGM system. CGI has completed the migration of data from eGrants to SGM, and is managing the data for the RREM and LRRP programs going forward.

8. Contract/Program Location Trenton, New Jersey

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9. Amount Expended to Date Amounts are based on current invoice totals as of September 30, 2015: Gilbane (RREM): $38,131,992; Gilbane (LRRP): $6,873,926CB&I/Shaw: $32,677,232CGI Federal: $39,379,272ICF: $40,363,816URS: $5,543,381HGI: $35,910,449Cohn Reznick: $9,065,058


N/A

11. Completion Status of Contract or Program Completion Status based on contract values and invoiced amounts as of September 30, 2015:RREM (Gilbane/CB&I Shaw/URS): approximately 52%LRRP (Gilbane): approximately 64%SIROMS/SGM (CGI): approximately 60%ICF: approximately 54%Cohn Reznick: 100%

12. Expected Contract End Date/Time Period RREM (Gilbane & CB&I Shaw): May 22, 2017 LRRP (Gilbane): June 30, 2016 CGI: May 24, 2016ICF: July 15,2016 Cohn Reznick: June 30, 2015


N/AMonitoring Activities

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Navigant's integrity oversight monitoring activity for the Third Quarter 2015 focused principally on four areas: (1) reviewing the invoices of the two RREM Contractors, Gilbane and CB&I/Shaw (“the Contractors”), and their numerous subcontractors; (2) attending and observing homeowner and Contractor meetings and inspections, conducting site visits of homes in the RREM program, and providing feedback to DCA and the Contractors; (3) completing our comprehensive technical electronic analyses of RREM application data to identify potentially problematic files for further review; and (4) developing the methodology to commence a technical electronic analysis of LRRP application data to identify potentially problematic files for further review. During this quarter, we conducted 20 meetings with DCA, Treasury , NJ Attorney General's Office, CB&I/Shaw, Gilbane, Housing Center staff and RREM applicants. We also conducted site visits in Hoboken, Union Beach and Toms River, NJ encompassing 133 properties.

A. Invoice Review:

Throughout the Quarter, we continued our review of the RREM and LRRP Contractor and their respective subcontractor invoices, and continued conducting the following three targeted reviews of certain billings:

(1) Follow up with CBI/Shaw and DCA to obtain and review the supporting documentation for the time and material invoices submitted by one of its hazmat subcontractors, quantify the extent of unsupported billings, and review any reissued invoices. (2) Obtain from Gilbane and review additional supporting documentation for the time and material invoices submitted by one of its hazmat subcontractors, and update our invoice analytics and preliminary findings.(3) Update our invoice database to compile relevant invoice details for further analysis to include comparing and reconciling Contractor purchase order amounts and certain subcontractor invoices.

Navigant reported in the prior Quarter’s report that a CBI/Shaw hazmat subcontractor submitted billings on a time and materials basis totaling $2.12 million, which included Contractor markups by CBI/Shaw. These billings were for 727 hazmat inspections (447 asbestos and 280 lead inspections). We followed up with CBI/Shaw and presented our findings and observations to DCA regarding the accuracy, adequacy and appropriateness of the supporting documentation. Consequently, CBI/Shaw agreed that it will correct these billings and submit revised invoices for this hazmat subcontractor’s entire time and materials billings that could not be properly supported.

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During the quarter, Navigant reviewed additional time and materials invoices submitted by the same CBI/Shaw hazmat subcontractor totaling $591K, which included Contractor markups by CBI/Shaw. This additional billings were for 223 hazmat inspections (119 asbestos and 104 lead inspections). Accordingly, CBI/Shaw has invoiced DCA a total of $2.71 million on a time and materials basis for a total of 950 hazmat inspections.

DCA concurred with Navigant's findings regarding the hazmat subcontractor's unsupported time and materials billings. Pursuant to our findings, DCA worked collaboratively with Navigant to review CBI/Shaw’s reissuance of the hazmat subcontractor’s billings that were originally prepared on a time and materials basis and then converted to a unit price basis. The reissued billings utilized unit prices which were previously approved unit rates between CBI/Shaw and its hazmat subcontractor and approved/accepted by DCA. As a result, the total of the revised invoices based on unit prices was $2.01 million . Accordingly, the reissuance of the time and materials billings to a unit price basis resulted in a savings to the State of New Jersey totaling $694K. DCA informed Navigant that the State will offset the $694K as a credit against CBI/Shaw invoices that have not been paid.

Additionally during this Quarter, Navigant continued our ongoing review of additional Gilbane subcontractor invoices to identify any pricing that is inconsistent with the Gilbane's purchase orders and/or contracts with their subcontractors. We continued to track and summarize these preliminary potential discrepancies, and followed up with Gilbane to obtain any amendments or updates to the existing subcontractors’ contractual documents to supplement or supersede, if applicable, information that Gilbane have provided to us to date. During the next Quarter when Navigant expects to receive all of the additional requested documentation, we will determine if the invoices are consistent with the contract terms, are accurate and fully supported, and quantify the extent of unsupported time and material invoices submitted by one of Gilbane’s hazmat subcontractors.

Navigant will continue to request and review new invoices submitted by the Contractors on a recurring basis, and will update our Contractor and Subcontractor invoice database to compile relevant invoice details for further ongoing analysis. This database will enable us to verify the mathematical accuracy of invoiced amounts, validate the invoiced unit rates, identify any second-tier subcontractors, track the amount of the subcontractors’ billings to date, and track total amounts billed by subcontractors to the terms of their subcontractor agreements or purchase orders. It will also enable us to conduct additional invoice analytics based on the RREM and LRRP application numbers, other key information and underlying source documents.

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B. Meetings and Inspections:During the Quarter, we reviewed relevant documentation available on SIROMS, conducted site visits and attended two (2) meetings with RREM applicants and various RREM program representatives, which included Contractors, homeowners and homeowner selected builders/lifters. The meetings consisted of a 5A Meeting, and a 50% Inspection.

The RREM Contractor ran the 5A Meeting in an organized manner, consistent with meetings attended in prior quarters. The documentation provided and/or reviewed at the meeting included the most current documentation available on SIROMS. The Contractor provided clear instructions and explanations, and damaged property owners affirmatively indicated they understood the information and directions being provided.

The 50% inspection, standard for Pathway C homes, was done in order to assess the value of the work that has been performed by the RREM assigned homebuilder. The RREM Contractor documented the current status by performing an inspection, including electronic photographs for record. The home had recently been lifted and new foundation/block walls were installed. Based on the Grant Award value, it was determined that the completed work exceeded the 50% threshold which would allow for the next draw of funding to be released to the homebuilder. As a follow-up, it was noted on SIROMS that a check dated 9/14/2015 was issued for this applicant.

Either prior or after attending the meetings we reviewed each applicant’s current workflow status and supporting documentation available within SIROMS, including the Grant Award Calculation (“GAC”), Work-in-Place Estimates (“WIP”), Estimated Cost to Repair (“ECR”) and Reimbursement Requests, among other documents. It was determined that there were no inconsistencies between SIROMS and the documents presented and reviewed in the meetings. The meetings were held at a damaged home that was currently being reconstructed and the Housing Recovery Centers (“HRC”). No issues were observed or found at either of the meetings.

In addition to attending the formal RREM Contractor meetings, a series of site visits were performed. Specifically, site visits were performed in three towns (Hoboken, Union Beach and Toms River) encompassing 133 properties in the RREM program. In preparation for the site visits, a list of the RREM homes within each town was extracted from SIROMS and verified with a CGI export of the data. The current “status” within SIROMS, as well as some key information, including Grant Award, Grant Award Signing Date, Reimbursement Award, Pathway, Payments Received etc., were extracted from SIROMS in preparation for the site visits.

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During the site visits, the status of construction, if any, and evidence of work either being performed, or completed was noted. As these site visits and inspections were random and not performed in conjunction with RREM Contractor or other scheduled meetings, interior inspections were not performed. Our observations included an evaluation of the following: (a) Were construction crews present; (b) Has the elevation of the damaged property been completed or in the process of being performed; (c) Is past or ongoing work evident; (d) Are construction permits posted; (e) Is the damaged property still an empty lot; and (f) Does the construction appear to be complete?

A total of 133 site visits were performed in three towns, Hoboken (36 total), Union Beach (79 total), and Toms River (18 total).

A database of the individual RREM Applicant’s information is being maintained for the damaged properties that were visited. In the next quarter, a review of the SIROMS data in conjunction with the site visit information will be evaluated to determine any areas of interest or specific files that may require follow-up.

C. Technical Electronic Analyses:During the Quarter, Navigant continued our comprehensive technical analyses to identify potentially problematic RREM applications for further review.

As a continuation of an analysis performed last Quarter, Navigant took further steps to identify additional potentially questionable changes to the mailing address and damaged property address fields recorded in SIROMS. This Quarter, Navigant received updated SIROMS audit log data from CGI, inclusive of all changes tracked in the original audit log extract and additional changes recorded since the original extract was received in November 2014. Using the updated extract, Navigant identified 3,438 funded or waitlisted applications in which a change was recorded in the SIROMS audit log for at least one of the address fields of interest. Because this step of the analysis was previously performed over the original audit log data, Navigant then isolated the additional changes made to the mailing address and damaged property address fields and ran the values recorded before and after each change through an algorithm that calculates the similarity between the contents of each field before and after each change.

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Based on the results, Navigant completed a detailed initial review of the additional changes in order to assign a risk ranking to each additional address change. Following the same process from our review of the original audit log extract data, Navigant applied a two-phased approach to identify an aggregated prioritized subset of 1,191 applications for further review. Similar to results established in the previous Quarter, our initial review indicated that there can be a number of reasons for a valid address change. Relevant public record research was conducted for a sample of the high risk applications identified in this subset, and it was determined from this research that the addresses for these applicants in this group were valid, and therefore did not warrant any further review or investigation.


Navigant obtained (1) from DCA, invoice-related documentation (2) from DCA, supplemental applicant related data (3) from the Contractors, regular schedules of their planned RREM applicant meetings and inspections, and some, but not all, of the invoice-related documentation requested; and (4) from CGI, data extracts containing the historical RREM application structured data available at the time of the data migration, the current RREM application structured data available when the extract was prepared, and the current audit trail of changes made to the RREM application data available when the extract was prepared. This data and information was utilized in the analyses described in paragraph 14 above.


As described in paragraph 14 above, during this Quarter, Navigant reviewed the invoices of the RREM Contractors and their subcontractors for billing irregularities; attended and observed homeowner and Contractor meetings and inspections to assess compliance with program policies, procedures and controls, and provided feedback to DCA and the Contractors; conducted site visits of homes under construction or repair; completed our two comprehensive technical electronic analyses of RREM application data to identify potentially problematic files for further review; and developed the methodology to commence a new technical analysis of LRRP application data to identify potentially problematic files for further review.

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As described in paragraph 14 above, during this Quarter, Navigant continued reviewing the RREM Contractor invoices and their subcontractor invoices, and updated our invoice database to compile relevant invoice details for further analysis. This database enables us to verify the mathematical accuracy of invoiced amounts, validate the invoiced unit rates, identify any second-tier subcontractors, track the amount of the subcontractors’ billings to date, track total amounts billed by subcontractors to the terms of their subcontractor agreements or purchase orders, and conduct additional invoice analytics based on the RREM and LRRP application numbers and other key information and underlying source documents. Our review during the Quarter continued to identify potential billing issues that require additional documentation to resolve. Navigant presented our preliminary findings related to the billing issues to DCA in the previous quarter. Pursuant to our findings, DCA worked with Navigant to continue their efforts to resolve the billing issues that subsequently resulted in a $694K savings to the State for the previous unsupported time and materials invoices submitted by CBI/Shaw for payment. To complete and close out this CBI/Shaw subcontractor’s time and materials invoice analysis, we examined the revised invoices and additional back-up documentation obtained by DCA from the Contractors and performed a reconciliation with our findings.


As described in paragraph 14 above, all of Navigant’s work this Quarter was designed to prevent and detect waste, fraud and abuse. Our review of the invoices of the RREM Contractors and their subcontractors sought to identify any potential irregularities with billings submitted by the Contractors and their subcontractors; our attendance at homeowner and RREM Contractor meetings and field inspections sought to identify any irregularities in the conduct of RREM meetings and inspections that might be in conflict with RREM program policies and procedures, or that might undermine the controls established for the program; our performance of site visits to analyze and reconcile the progress of repairs with payments made to both homeowners or homebuilders; and our technical electronic analyses of the universe of RREM and LRRP applications sought to identify potentially problematic applications for further review using data extracts from SIROMS.

19. Provide details of any integrity issues/findings

As explained in paragraphs 14 and 18 above, our review of the invoices of the RREM Contractors and their subcontractors identified potential billing issues. The billing issues are in the process of being resolved pursuant to the issuance of revised invoices and a credit memo to the State, and we continue to review and reconcile against our analysis in the next Quarter after receipt of additional documentation from DCA; and the second of two technical electronic analyses of the universe of RREM applications using data extracts from SIROMS which addressed potential applicant eligibility issues was completed and no further action will be necessary. We have also developed a methodology to commence a new technical analysis of LRRP applications, similar to our RREM technical analyses, using data extracts from SIROMS to identify and analyze potential applicant eligibility issues. This analysis will commence in the next Quarter.

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20. Provide details of any work quality or safety/environmental/historical preservation issue(s).

N/A


N/A

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N/A


For the Quarter Ending September 30, 2015: Total hours incurred: 617.60 hours Total fees incurred: $166,195 Total expenses incurred: $0


N/A

Name of Integrity Monitor: Navigant Consulting Inc.Name of Report Preparer: Daniel F. Gill

Signature:Date: December 31,2015

C. Miscellaneous

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A. David Reiner

B. Laura Shea

C. Sam Viavattine Director, Sandy Recovery Division

D. Robert Bartolone Director, Office of Auditing

E. Elizabeth Mackay Assistant Division Director-Legal

F. Jerry O'Brien Principal Fiscal Analyst

G. Vera Ellen Ricciardi CFO, Sandy Recovery Division

H. Michael Simon Compliance

I. Terri Quintero Sr. Contracting Officer-Procurement/Legal- Sandy Recovery Division

A. David Ridolfino Associate Deputy State Treasurer

B. Roseann Kovall Integrity Oversight Monitor Program

C. Jeff Burns Division of Administration-Emergency Operations Coordinator

D. Matthew Murray Office of the Treasurer-Deputy Chief of Staff

A. Bart Gentile Project Manager

B. Virginia Franco Project Manager

A. Jo Carroll Program Manager

B. Tarek Bahgat Project Controls Manager

C. Daniel Paetzold Deputy Program Manager- RREM Program

III. Gilbane Building Company

V. Shaw Environmental, Inc. (a CB&I Company)

Appendix AMeetings Conducted

For Quarter Ending 9/30/2015

I. Department of Community Affairs

II. Department of the Treasury

Deputy Commissioner, Sandy Recovery Division

Assistant Commissioner, Sandy Recovery Division

State of New JerseyDepartment of the TreasuryIntegrity Oversight Monitoring Reporting Model

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Firm Name: Thacher Associates LLCEngagement: NJ Transit - Gladstone Line Poles & Foundations Replacement Project



1. Recipient of funding New Jersey Transit Corporation2. Federal Funding Agency? (e.g. HUD, FEMA) Federal Transit Administration3. State Funding (if applicable) N/A4. Award Type Emergency Relief Program5. Award Amount $13,308,080.00 Represents the contract value of the single contract in Thacher Associates

current scope of work.6. Contract/Program Person/Title Aamir Marvi, Director, Internal, Capital & IS Audits7. Brief Description, Purpose and Rationale of Project/Program This project consists of installing new concrete foundations and steel

poles on the Gladstone Branch of New Jersey Transit's Morris & Essex Line.

8. Contract/Program Location Gladstone Branch (New Providence to Gladstone Rail Yard)9. Amount Expended to Date $9,312,830.64 through August 31, 2015; approved by New Jersey Transit

and paid to Case Foundation Company (CFC).As of September 30, 2015, Thacher Associates had received and reviewed payment requisitions through August 31, 2015.

10. Amount Provided to other State or Local Entities None11. Completion Status of Contract or Program In Progress12. Expected Contract End Date/Time Period Anticipated to be completed by December 2017B. Monitoring Activities


N/A


Thacher Associates (Thacher) commenced fieldwork in July 2015 beginning with a formal document request dated July 6, 2015. Thacher met with New Jersey Transit (NJT) at Penn Plaza Headquarters (on multiple occasions between July 1, 2015 and September 30, 2015 to discuss various aspects of the IOM services project); and conducted a site visit on August 1, 2015 to observe work performed near the Peapack train station. from CFC (the prime contractor) and L&R Construction (a DBE subcontractor). Thacher also visited NJT's field office located in Plainfield, NJ (on August 6, 2015) to review documents compiled in response to our July 2015 document request.


NJT provided Thacher with electronic copies of payment requisitions and certified payroll reports in September 2015. Thacher has performed preliminary reviews of this information and has submitted additional follow-up requests to NJT for communication to CFC and L&R and reviews are ongoing.


Thacher is currently reviewing payment requisitions and certified payroll reports to assess CFC's compliance with contractual and legal requirements in the areas of procurement, prevailing wage rules, and payment to task order contractors.


State of New JerseyDepartment of the TreasuryIntegrity Oversight Monitoring Reporting Model

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Firm Name: Thacher Associates LLCEngagement: NJ Transit - Gladstone Line Poles & Foundations Replacement Project





Payment requisitions for February 2015 through June 2015 were received from NJT in September 2015 and Thacher reviewed areas pertaining to the schedule of values, allowances, quantities/amounts billed, and stored materials (where applicable).


Thacher conducted a site visit on August 1, 2015 and interviewed workers on site at the Peapack train station (on August 1, 2015) from CFC (the prime contractor) and L&R Construction (a DBE subcontractor to CFC). Preliminary activities detailed in box 16 (above) are ongoing. Our reviews have not uncovered any integrity-related issues to date.

19. Provide details of any integrity issues/findings N/A20. Provide details of any work quality or safety/environmental/historical

preservation issue(s).N/A


N/A


N/A

C. Miscellaneous


For the period July 1, 2015 through September 30, 2015, Thacher expended 92.50 hours at a cost of $16,730.00 and no expenses. This includes site and office visits, document reviews, and preliminary follow-up discussions with NJT. Additionally, Thacher has regularly provided updates to NJT and filed quarterly reports with the Department of the Treasury for the quarter ended June 30, 2015.

24. Add any item, issue or comment not covered in previous sections but deemed pertinent to monitoring program. None.

Name of Integrity Monitor: Thacher Associates LLCName of Report Preparer: Bradley J. Breslin, Director of OperationsSignature:Date: January 11, 2016

new jersey legislature...8. contract/program location various counties in new jersey 9. amount...

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