RECOVERY OVERSIGHT ADVISORY

Manhan Fish Passage

November 2011 Report No.: RO-C-FWS-068-2011
ADVISORY
OFFICE OF
INSPECTOR GENERAL
U.S.DEPARTMENT OF THE INTERIOR


NOV 0 1 2011
Memorandum
To: Rhea S. Suh
Assistant Secretary, Policy, Management and Budget
Through: Mary Pletcher
Deputy Director, National Business Center
From
Assistant Inspector General for Recovery Oversight
Subject: Recovery Oversight Advisory - Manhan Fish Passage
Report No. RO-C-FWS-068-2011
This advisory regarding the Manhan Fish Passage is part of our ongoing efforts to
oversee and ensure the accountability of funding appropriated to the U.S. Fish and Wildlife
Service (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 and
Transparency Board (RA TB) concerning the FWS Manhan Fish Passage project in Easthampton,
MA (city). According to the 2010 "Finding of No Significant Impact for the Environmental
Assessment" of the project, "[t]he purpose of the Project is to enhance the ecological diversity of
the Manhan River by restoring access to spawning and rearing habitat for migratory fishes ... The
Proposed Action [Project] involves the construction of a . . . fish ladder and downstream passage
pipe at the Manhan River Dam in Easthampton, Massachusetts (city). "
The RA TB referral involved a complaint alleging the project to be significantly over
budget, mismanaged, and misrepresented. Allegedly, the project budgeted $750,000 and claimed
it would create 6.33 jobs; the budget has now increased 20 percent to $909,998, with no
additional jobs created. The discovery of unforeseen conditions at the dam after construction
began has hindered completion of the fish ladder and increased costs.
In addition, the complainant alleged that the project interferes with the complainant's
property rights, that the recommended $107,000 in repairs to the dam have not been included in
the yearly capital plan, and that the public has heard little about the ongoing maintenance and
repair of the fish passage. Furthermore, the complainant believes that the dam may serve no
purpose.
Recovery Over Sight Offi ce I Washington, DC

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We reviewed the complaint by taking the following actions: reviewing the cooperative
agreement between FWS and the city, interviewing the complainant as well as FWS and city
officials, 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 to
RATB. On July 7, 2011, FWS sent a written response to the complainant, who claimed that the
letter addressed only the completion date of the fish passage and the anticipated cost, rather than
all of his concerns.

Project Status

The unforeseen conditions discovered after site construction began involved a rock ledge
at the location of the ladder turnpool, and timbers in the river bed that prevented the installation
of 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, a
practice not normally employed during the design phase of a project unless a question about site
conditions exists. The project is currently on hold, while the city seeks additional funds from the
Army 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 to
date, which includes the assessment to determine the condition of the dam and the resulting
required design changes. FWS expects to have approximately $92,490 remaining after all costs
to date are realized, but will require additional funds to complete the project. FWS thinks funds
will be in place by fall of 2011.

We are concerned that the remaining $92,490 obligated on the grant with the city may not
be expended in a timely fashion. Unless additional funds are applied to the project, obligated
funds may not be used by September 30, 2015, the date by which obligated balances must be
liquidated. Consideration may be given to whether these funds might be used in a timelier
manner on other FWS Recovery Act projects. If FWS chooses to apply these funds to other
Recovery 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 of
the design plans, and an environmental assessment for the project. COE would contribute
$425,591; the Fisheries program (another Federal program) would contribute $50,000; $92,490
would come from the balance of FWS Recovery Act funds on the project; and $229,164 would
come from non-Federal sources. We are concerned about the appropriateness of using Recovery
Act 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 resulting
in a $5,400 (0.7 percent) reduction in total cost. FWS also stated that their intent was to use the
remaining 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 (with
technical 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 Act
funds would be used to cover prior COE costs.

Project Design

The unforeseen site conditions were not discovered during the design phase by the
architect/engineering firm contracted by the city. FWS officials told us they expected that an
integral part of the structural design work by the firm would include reviewing all available
information on the composition of the dam, details of recent repairs, and the strength and
foundation 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 site
assessments. We found that one of these reports was prepared in 2006 by the
architect/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 2011on
Recovery.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 percent
complete. The city indicated that it incorrectly completed the quarterly report required under the
Recovery Act for the first quarter of 2011, since it improperly reflected the percentage of work
completed and did not include all subrecipients. The city corrected these omissions with the June
30, 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 were
also inconsistent because one section required the SF-425 to be completed at the end of the
project, and another section required annual completion. FWS responded that the problem was
corrected when the city filed the required SF 425 on June 30, 2011. Because the cooperative
agreement was based on a bureau template, it is possible that SF-425s are not being filed on a
timely basis by other recipients.

Davis-Bacon Wage Rates

Five categories appeared on the certified payrolls of the contractor originally hired by the
city to construct the project: Equipment Operator FM, Laborer, Carpenter, Operator, and Laborer
Foreman. These categories did not match the wage determination attached to the grant
agreement. The certified payrolls indicated that, in addition [emphasis added] to the basic
hourly wage rate paid to each laborer or mechanic listed in the above referred payroll, payments
of 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 to
receive Columbus Day as a paid holiday. We found that some of these employees worked on
Columbus 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 [construction
contractor] allows its workers to work Columbus Day in exchange for a day off on the day after
Thanksgiving. This exchange of the paid holiday for the day after Thanksgiving was not
mentioned 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 the
issue of whether additional jobs were created by the additional funding.

2. Determine if reallocating the remaining unexpended funds to other Recovery Act projects
is 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 appropriate
action.

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

cc: Deputy Secretary, U.S. Department of the Interior
Director, Office of Executive Secretariat and Regulatory Affairs
Director, Office of Acquisition and Property Management
Acting Director, Office of Financial Management
Director, U.S. Fish and Wildlife Service
Departmental GAO/ OIG Audit Liaison
Audit Liaison, Office of the Secretary
Audit Liaison, U.S. Fish & Wildlife Service
Recovery Coordinator, U.S. Fish & Wildlife Service































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