Architectural & Engineering Services Report on Contractual Compliance. Sound Transit

Architectural & Engineering Services Report on Contractual Compliance Sound Transit November 16, 2015

November 16, 2015 Ms. Shelli Applegate Senior Internal Auditor Sound Transit 401 S Jackson Street Seattle, Washington 98104 One Union Square, Suite 1100 600 University Street Seattle, WA, 98101 O +1 206 281 4444 F +1 206 676 1193 www.rsmus.com Dear Shelli: RSM US LLP has provided contract compliance review services for five (5) architectural and engineering agreements entered into between Sound Transit and Parsons-Brinckerhoff (the Agreement(s) ). Our services were focused on the verification of amounts due under the cost-plus fixed-fee contracts, in accordance with the terms of our engagement letter and audit plan. Our services were conducted and performed on selected accounting records and transactions through December 31, 2014. Our report includes our observations on project management and is divided into the following sections: Executive Summary Provides an introduction, the scope and objectives, and an overview of the findings and observations identified. Observations for Project Details the specific observations on project management processes, policies and procedures and includes related recommendations. This report is intended solely for the information and use of management and the audit committee of Sound Transit. It is not intended to be, and should not be, used by anyone other than these specified parties. Sound Transit s external auditors and regulators may be provided with a copy of this report in connection with fulfilling their respective responsibilities. We appreciate the cooperation extended to us during this review and are pleased to be of service to Sound Transit. If you have any questions concerning this report, please contact Corey Saunders at 206.341.8052. Sincerely,

TABLE OF CONTENTS SECTION PAGE I. EXECUTIVE SUMMARY... 1 A. BACKGROUND... 1 B. SCOPE AND OBJECTIVES... 1 C. OBSERVATIONS... 2 II. OBSERVATIONS ON PROJECT MANAGEMENT... 3 A. APPROVAL OF PERSONNEL ADDITIONS... 3 B. APPROVAL OF DIRECT LABOR RATES... 3 C. APPROVAL OF TRAVEL COSTS... 4 D. APPROVAL OF OVERTIME COSTS... 5 E. PROJECT COST TRACKING... 5 F. LEASED VEHICLE COSTS... 6 III. EXHIBIT A: SUMMARY OF CONTRACT COMPLIANCE PROCEDURES... 7 IV. EXHIBIT B: SUMMARY OF OBSERVATIONS... 10 2015 RSM US LLP. All Rights Reserved.

I. EXECUTIVE SUMMARY A. BACKGROUND Sound Transit entered into five (5) agreements (the Agreements) with Parsons-Brinckerhoff, Inc. (PB) to provide architectural and engineering services for various planning and construction projects in the Puget Sound Region. The table below shows each of the five (5) agreements reviewed. Each project was in various stages of completion at the time of our review. Contract # Project Name Contract Date Contract Total RTA/AE 0190-10 RTA/AE 0060-12 RTA/AE 0073-12 RTA/AE 0169-12 RTA/AE 0084-13 Track Bridge Design (Phase I & II) Design-Build Project Services for South Link Light Rail Seattle to South Bellevue Final Design Ballard to Downtown Seattle High- Capacity (NCT) Planning Study Regional Long-Range Plan Update & Programmatic Environmental Impact Statement (EIS) 02/28/2011 $14,722,840.29 09/06/2012 $14,636,286.00 10/31/2012 $27,885,000.00 01/25/2013 $2,168,744.00 10/10/2013 $4,330,493.45 B. SCOPE AND OBJECTIVES The objective of the contract compliance review was to verify amounts due under the five (5) cost-plus fixed-fee contracts defined above. Based upon an assessment of project cost risks conducted in coordination with Sound Transit management, the contract compliance review included the following: Reviewed the Agreements and related contract documentation Reviewed and verified the direct labor rates invoiced Reviewed and verified the direct labor hours invoiced to the Project Reviewed and verified the subcontractor costs invoiced Reconciled job costs to identify variances Reviewed and verified overhead rates Determined if Other Direct Costs were invoiced in accordance with the agreements Evaluated change orders for accuracy and entitlement Section III, Exhibit A of this report sets forth the procedures used to conduct the review. 2015 RSM US LLP. All Rights Reserved. Page 1

C. OBSERVATIONS Overall, RSM observed that project costs reviewed were well-supported, well-documented and in compliance with contractual terms and conditions. Other than the observations noted in Section II Observations on Project, Parson-Brinckerhoff s invoices were typically well-organized, accurate and complete. We found that Sound Transit s A&E procurement and contract administration processes, procedures and controls were generally strong and being adhered to by Sound Transit personnel. No observations were noted for Contracts RTA/AE 0169-12 or RTA/AE 0084-13. Section II Observations on Project discusses specific observations on project management processes, policies and procedures. We have included recommendations for improvements to invoicing processes and procedures and recommendations to strengthen or amend contract language. Observations on Project RSM has observed what we believe to be processes related to PB s management and administration of the contracts that present a risk for overbillings, invoicing errors and potential disagreement between PB and Sound Transit. We have included a description of these issues for Sound Transit s review and related recommendations for mitigation of the risk presented. Our detailed observations are set forth in Section II and Exhibit B of this report. Approval of Personnel Additions: For several additions of new personnel who provided labor on the project, PB did not request and/or obtain approval for those personnel from Sound Transit. Approval of Direct Labor Rates: For some personnel who provided labor on the projects, PB did not request and/or obtain approval of changes to direct labor rates from Sound Transit. Project Cost Tracking: For one of the contracts under review, RSM noted a difference between the amounts PB tracked as the total costs-to-date versus the amount that had been paid by Sound Transit. This appears to be due to PB including disputed amounts in their billings and total costs-to-date. Leased Vehicle Costs: On one of the projects, we noted a number of leased vehicle costs charged to the Project. The Agreement does not provide sufficient definition of reimbursable equipment costs to determine whether these costs are compensable. 2015 RSM US LLP. All Rights Reserved. Page 2

II. OBSERVATIONS ON PROJECT MANAGEMENT A. APPROVAL OF PERSONNEL ADDITIONS Observation: RSM reviewed personnel changes and additions to the project in accordance with contract labor rate schedules (typically a cost proposal, budget or schedule of labor rates incorporated as an exhibit to the Agreement) and Sound Transit approvals of requests for new personnel submitted by PB over the course of the contracts. We compared personnel changes and additions to the project to requests and approvals for those personnel. During our review of Contract RTA A/E 0060-12, we noted that PB did not request and/or obtain prior written approval for four (4) personnel changes and/or additions. Upon review of the contract terms and conditions, we noted that the initial employees staffed to the project are identified in the contract rate schedules, and the process to approve any increases to those employees direct labor rates, is well-defined in the Agreement. However the Agreement does not include sufficient language detailing the Consultant s requirements for the addition of new project personnel. The Consultant s responsibilities for submitting new personnel requests, as well as Sound Transit s process for approving new personnel requests, are not specified in the Direct Labor section of the Agreement. Recommendation: RSM recommends that the section of the Agreement that addresses Direct Labor costs (Section 12.B of the main contract) be reviewed to determine if additional requirements should be added for the addition of new project personnel. At a minimum, this section should define the types of employees that can be added to the project, any restrictions on the duties or positions they are permitted to fulfill, any restrictions on direct labor rates or overhead rates, and the process for submitting a request for and approval of new project personnel. Sound Transit Response: Section 2 Administration and Supervision D. provides, in part that, Sound Transit and the Consultant have designated certain personnel as "Key Personnel" and such personnel are identified in Exhibit H, Key Personnel. Any change in Key Personnel or the level of effort of Key Personnel without the prior written consent of Sound Transit may be considered a material breach. Sound Transit will review the Agreement and determine if Section 12.B should define types of employees other than Key Personnel (as described above) that can be added to the project, any restrictions on the duties or positions they are permitted to fulfill, any restrictions on direct labor rates or overhead rates, and the process for submitting a request for and approval of new project personnel. B. APPROVAL OF DIRECT LABOR RATES Observation: RSM reviewed direct labor rates charged to the project in accordance with contract labor rate schedules (typically a cost proposal, budget or schedule of labor rates incorporated as an exhibit to the Agreement) and Sound Transit approvals of requests for direct labor rate increases submitted by PB over the course of the contracts. 2015 RSM US LLP. All Rights Reserved. Page 3

During our review of Contracts RTA A/E 0060-12 and RTA A/E 0073-12, we noted several employees for whom PB did not submit a request for, and/or obtain approval of, the employee s direct labor rate prior to invoicing for the labor. In total, we identified nine (9) employees to whom this observation applied. We also noted two (2) employees who performed services under Contractor RTA A/E 0060-12 whose initial direct labor rates were not appropriately approved under the requirements of the Agreement. Additionally we identified two (2) Key Personnel requests for services under Contract RTA A/E 0190-10 that did not include the employee s direct labor rate. Although PB is not explicitly required to provide the direct labor rate of Key Personnel under the terms of the Agreement, it would be reasonable to assume that Sound Transit be afforded the opportunity to review and approve the labor rates of any incoming personnel regardless of position or confirm that the rate would not change for the same role. During our review of the contract documentation, we observed that the contract rate schedules attached as exhibits to the Agreements are at times incorporated by an incorrect reference. For example, Contract RTA A/E 0073-12 references Exhibit D, Summary of Fees form as the basis for direct labor rates. However, the Summary of Fees does not include direct labor rates. It is also attached as Exhibit B to this Agreement. Conversely, Exhibit C Budget Baseline includes a list of employees by firm, task, position, and direct labor rate and is used as the basis for contract labor rates. Recommendation: RSM recommends that stricter controls be implemented in the request and approval of direct labor rates. RSM also recommends that the section of the Agreement that addresses Key Personnel and Key Personnel changes (Section 2.D of the main contract) be reviewed to determine if additional language should be added requiring the employee s labor rate be provided with the request for change. RSM recommends that agreements be thoroughly reviewed to ensure that references to exhibits in the main contract are accurate. Sound Transit Response: Sound Transit will review and evaluate current procedures for request and approval of labor rates. Sound Transit will also perform a thorough review of Agreements to ensure references to exhibits are accurate. C. APPROVAL OF TRAVEL COSTS Observation: During our review of Contract RTA A/E 0073-12, RSM noted a significant amount of travel expense costs billed to the project. The travel expenses related primarily to airfare and hotel costs for employees of PB traveling to Seattle from out of state. We reviewed these costs in accordance with the provisions the Agreement for the reimbursement of travel-related expenses. Per the Agreement, all travel costs for employees in travel status (a trip originating more than 50 miles beyond Sound Transit boundaries) are to be approved in advance by Sound Transit. During our review, we identified 13 travel charges which PB did not request and/or obtain advance approval from Sound Transit prior to invoicing, as required by the Agreement. 2015 RSM US LLP. All Rights Reserved. Page 4

Further detail of this finding and the travel costs included in the adjustment is included in Exhibit B Summary of Findings. Recommendation: RSM recommends that existing controls be enforced and adhered to in the request and approval process for Travel Costs. At a minimum, these processes should comport with the requirement of the Agreement, which is to provide Sound Transit a formal request for Travel Costs and obtain written approval prior to invoicing for any Travel Costs incurred while on travel status. Sound Transit Response: Sound Transit will review and consider additional requirements for enforcing and adhering to the existing approval process for Travel Costs as recommended. D. APPROVAL OF OVERTIME COSTS Observation: Per the Agreement, no overtime in excess of 40 hours per week shall be paid by Sound Transit without prior written approval of Sound Transit. During our review of the overtime costs billed under Contract RTA A/E 0060-12, we noted that one employee s overtime hours during July 2014 were billed to the project without prior approval of Sound Transit. Recommendation: RSM recommends that existing controls be enforced and adhered to in the request and approval process for Overtime Costs. At a minimum, these processes should comport with the requirement of the Agreement, which is to provide Sound Transit a formal request for Overtime Labor and obtain written approval prior to invoicing for any Overtime Labor. Sound Transit Response: Sound Transit currently has controls in place for approval of overtime. Although the audit only identified one instance where overtime approval was not located, the Project Manager for RTA A/E 0060-12 has been reminded of the procedures. E. PROJECT COST TRACKING Observation: During our reconciliation of total costs-to-date to amounts paid for Contract RTA A/E 0073-12, we noted a difference of approximately $109,481 between the amount PB tracked as total costs-to-date on their invoice versus the total amount that had been paid by Sound Transit. This analysis was performed through Invoice 27, dated October 27, 2014. Upon follow-up with PB, this difference appears to be due to PB including disputed amounts in previous billings and reflecting those amounts in the total costs-to-date (it should be noted that despite this error, Sound Transit tracked the correct amounts on their internal Progress Payment forms). As a matter of contracting best practices, disputed amounts in monthly billings for which payment will be withheld should not be included by the Consultant in the current period due amount or the total costs-to-date. Doing so gives the project owner a clear understanding of the financial position of the contract. PB indicated that this difference has since been resolved and the total costs-to-date being tracked by PB for Contract RTA A/E 0073-12 now agree with the total amounts paid to date. 2015 RSM US LLP. All Rights Reserved. Page 5

Recommendation: RSM recommends that Sound Transit confirm that PB s current accounting of total costs-todate for Contract RTA A/E 0073-12 is accurate and free of error. Additionally, we recommend that Sound Transit request that PB withholds any disputed amounts from future billings until those issues are resolved. This will provide Sound Transit with a clear understanding of the financial position of the contract. Sound Transit Response: Sound Transit tracks the corrected amounts and has a clear understanding of the financial position of the contract due to this tracking. Sound Transit is currently in the process of reconciling costs-to-date with PB. All costs are reconciled prior to final payment. Sound Transit will request that PB withholds disputed amounts from the monthly billings until those issues are resolved. F. LEASED VEHICLE COSTS Observation: During our review of Other Direct Costs billed for Contract RTA A/E 0060-12, we noted that PB and a subconsultant on the project, KBA, billed costs for leased vehicles. PB charged approximately $38,434 for these costs and KBA charged approximately $27,599. After review of the Agreement terms and conditions related to travel costs, we noted that rental car costs are capped after 15 days of consecutive travel, at which point an employee is required to be approved for commuter status and is reimbursed under a monthly allowance. However the leased vehicle costs were charged monthly from September 2012 through December 2014 (monthly costs for PB ranged from approximately $540 to $2,200 per month for rental cars for 2-5 employees; monthly costs for KBA ranged from approximately $800 to $1,900 for 1-2 employees). This appears to be in conflict with the terms and conditions related to travel costs in the Agreement, and the Agreement does not provide sufficient definition of reimbursable equipment costs to determine whether these costs are compensable as equipment. Upon follow-up with PB, PB indicated that these costs related to leased trucks that were necessary to the project and would not be considered travel expenses. After additional follow up with Sound Transit, it was confirmed that leased vehicles are considered Project Equipment Rental costs and were authorized during contract negotiations with PB. Recommendations: RSM recommends that Sound Transit review this type of cost in future Agreements to determine if leased vehicles are necessary to the performance of project duties. RSM also recommends that Sound Transit include stronger language in future Agreements to define reimbursable project equipment costs. Sound Transit Response: For each procurement during negotiations Sound Transit does a thorough analysis of equipment necessary for performing the work. We will review our contract agreement language. 2015 RSM US LLP. All Rights Reserved. Page 6

III. EXHIBIT A: SUMMARY OF CONTRACT COMPLIANCE PROCEDURES The following is a summary of the contract compliance procedures. PARSONS-BRINCKERHOFF A/E AGREEMENTS 1) Reviewed the Agreements and related contract documentation between Sound Transit and Parsons-Brinckerhoff (PB) as well as selected subconsultants engaged by PB in the execution of the scope. This included: a) Reviewed prime agreements, including exhibits and amendments to agreements b) Obtained selected subconsultant agreements between PB and subconsultants, including exhibits and amendments to agreements, and reviewed for selected subs c) Extracted key terms and definitions from the Agreements for each project d) Discussed terms and conditions that needed clarification with Sound Transit 2) Conducted planning phase, including: a) Prepared the initial request for information b) Obtained and reviewed all payment applications from PB to Sound Transit c) Obtained and reviewed all payment applications from selected subconsultants to PB d) Obtained and reviewed all change orders with cost impacts between PB and Sound Transit, including adequate change order support e) Obtained and reviewed change orders between PB and selected subconsultants, including adequate change order support f) Obtained and reviewed approvals from Sound Transit for any changes to Key Personnel g) Obtained and reviewed approvals from Sound Transit for employees with "Commuter Status" h) Obtained and reviewed approvals from Sound Transit for employees with "Relocation Status" i) Obtained and reviewed reconciliation of total recorded costs in project cost report to total amount billed to Sound Transit j) Obtained all direct labor rate, and overhead rate increases approved by Sound Transit and reviewed to ensure adequate support per requirements of agreements k) Obtained and reviewed approval for all overtime hours worked l) Obtained and reviewed audited indirect cost rate schedules included in all overhead rates billed (to Sound Transit or PB) m) Obtained and reviewed identification on any related party or wholly-owned companies providing services under the agreement from PB and selected subconsultants 2015 RSM US LLP. All Rights Reserved. Page 7

n) Obtained electronic job cost report / project account ledger from PB and selected subconsultants o) Obtained electronic direct labor report from PB and selected subconsultants 3) Reconciled job costs to identify variances, including: a) Reconciled total direct labor in direct labor report to total direct labor cost in job cost report to verify amounts agree b) Reconciled total recorded job costs in job cost report to total amount billed to verify amounts agree c) Reconciled total amount billed to contract sum to verify billed amounts do not exceed contract sum d) Compiled pay application progress billing values into "roll-forward" analysis to verify total completed amounts properly roll forward into subsequent pay applications e) Compiled pay application change order values into "roll-forward" analysis to verify revised contract values properly roll forward into subsequent pay applications 4) Determined if labor rates were accurately invoiced, including: a) Reviewed approvals for any changes to "Key Personnel" b) Selected a sample of labor costs (by employee and period) from direct labor report for labor and overhead rate testing c) Reviewed labor rate increases for adequate support, per requirements of agreement d) Applied labor rate increases to project budget baseline schedules to create schedule of approved employee labor rates over the course of the project e) Tested billed employee labor rates to approved employee labor rates in order to identify variances 5) Determined if labor hours were accurately invoiced, including: a) Selected labor testing sample and requested timesheet support for billed labor hours in sample b) Tested billed labor hours to timecard or timesheet support c) Confirmed that PB has a sophisticated and robust timekeeping system sufficient to accurately capture and record time to projects d) Performed hours outliers analysis to identify employees with greater than 40 hours per week and verified that employees with greater than 40 hours per week have received overtime approval e) Compared PB labor costs between projects for duplication in comparable periods 2015 RSM US LLP. All Rights Reserved. Page 8

6) Determined if overhead rates were accurately invoiced, including: a) Reviewed overhead rate increases for adequate support, per requirements of agreement b) Reviewed audited indirect cost rate schedules for appropriateness of costs and duplication of overhead costs and other direct costs c) Applied overhead rate increases to project budget baseline overhead rates to create schedule of approved overhead rates over the course of the project d) Tested billed employee overhead rates to approved employee labor rates 7) Determined if Other Direct Costs were invoiced in accordance with the agreements, including: a) Reviewed job cost report for high-risk other direct costs and grouped into categories b) Verified that all incidental travel costs were billed in accordance with requirements of agreement c) Verified that all travel costs for "Commuter Status" employees were billed in accordance with requirements of agreement d) Verified that all travel costs for "Relocation Status" employees were billed in accordance with requirements of agreement e) Selected sample of other direct costs for testing based on dollar amount and/or risk identified f) Tested sample of other direct costs to actual cost support in pay applications g) Performed duplicative cost analysis using job cost report data h) Selected and tested sub-sample of other direct costs for evidence of payment testing 8) Evaluated change orders for accuracy and entitlement, including: a) Reviewed change orders for appropriate signatures b) Reviewed change orders to determine if sufficient documentation is included to evaluate pricing c) Interviewed project personnel to understand the basis of change orders and determine whether additional fee was reimbursable under the terms and conditions of the agreement 2015 RSM US LLP. All Rights Reserved. Page 9

IV. EXHIBIT B: SUMMARY OF OBSERVATIONS A detailed listing of the exceptions noted during our testing procedures follows in the attached exhibit. Item Type Contract Observations PB Response Sound Transit Follow- Up Conclusion A.1 Project 0060-12 RSM noted the following discrepancies between proposed labor rates in the Agreement and billed labor rates: a. Ian Hubbard's proposed labor rate (including overhead) was $194.75. However this employee's bill rate was $202.54 from September 2012 through October 2013. b. Thomas Wilson's proposed labor rate (including overhead) was $143.46. However this employee's bill rate was $149.57 from September 2012 through July 2013. PB responded that the cost proposal, which was used as the basis for determining the contract budget, was submitted in June 2012. PB s annual salary rate increase took effect July 28, 2012 prior to NTP and contract execution. Rates increased due to salary adjustments between time of negotiation and contract execution. A salary adjustment request dated prior to the execution of the Agreement was provided to support the rates. The contract Agreement amounts did not change after the rate adjustments. The salary adjustment request was not evidenced in the Agreement. A.2 Project 0060-12 For employee Orlando Colon, we could not locate approval for the overtime hours incurred and billed during the July 2014 period. PB did not respond to our request. No documentation found. There was no approval for this employee's overtime labor costs. A.3 Project 0060-12 We could not locate approvals for the following personnel added to the project: a. Todd Mickelson (Assistant Office Engineer/Document Control Specialist) b. Shelene Wilke (Document Control Specialist) c. Mark Velasquez (Change ) d. John Carter (Sr. Supervisory Engineer Structural Design Reviews) PB provided request for employee but no corresponding approval from Sound Transit. Sound Transit unable to locate documentation of approvals (formal requests were found and in some cases CM emailed approval to Sound Transit Contract Specialist, however there was no authorization sent to PB). A request does not provide evidence that Sound Transit approved the employee's labor costs. 2015 RSM US LLP. All Rights Reserved. Page 10

Item Type Contract Observations PB Response Sound Transit Follow- Up Conclusion A.4 Project 0060-12 In addition to the above, we could not locate approvals of direct labor rates for the following personnel added to the project: a. Daniel Babuca (Resident Engineer) b. Orland Colon (Chief Inspector) c. Matt Robinson (Document Control / QE) d. Justin Clark (PB Inspector) e. Richard Capka PB either did not respond to this request or provided request for employee's labor rate but no corresponding approval from Sound Transit. Sound Transit unable to locate documentation of approvals (formal requests were found and in some cases CM emailed approval to Sound Transit Contract Specialist, however there was no authorization sent to PB). A request does not provide evidence that Sound Transit approved the employee's labor costs. However the approval of labor rates for new personnel is not sufficiently defined in the Agreement. A.5 Project 0060-12 During our review of project costs, we noted leased vehicles being charged to the project. Per conversation with PB on May 15, 2015, these costs relate to leased trucks that were necessary to the project and would not be considered Travel Costs. Sound Transit indicated vehicles were approved during contract negotiation as Other Direct Costs. It is unclear whether these costs are reimbursable per the terms of the Agreement. A.6 Project 0073-12 We could not locate the initial direct labor rate approvals for the following personnel: a. Thomas Mudayankavil b. Roupen Donikian c. Kimberly Muggs d. Seungwoo Lee PB provided a request for employee's labor rate but no corresponding approval from Sound Transit. Sound Transit unable to locate approval documentation. A request does not provide evidence that Sound Transit approved the employee's labor costs. However the approval of labor rates for new personnel is not sufficiently defined in the Agreement. A.7 Project 0073-12 Based on the project cost report, we were unable to reconcile the total amounts shown in the project cost report to the total amounts billed. We noted a difference of approximately $109,481 between the amount PB tracked as total costs-to-date on their invoice versus the total amount that had been paid by Sound Transit through Invoice 27, dated October 27, 2014. Per conversation with PB on August 7, 2015, this was due to the inclusion of disputed amounts in previous billings. PB indicates that the issue has since been resolved and current period billings reflect the correct information. RSM addressed this issue with PB. A difference is noted for the period under review; however the issue may have since been resolved. 2015 RSM US LLP. All Rights Reserved. Page 11

Item Type Contract Observations PB Response Sound Transit Follow- Up Conclusion A.8 Project 0073-12 For multiple travel costs invoiced, we could not locate pre-approval from Sound Transit, as is required by the terms of the Agreement: a. WEAVER, JONATHAN T TICKET FARE 6/12/2014 $834.00 b. AHMED, GULZAR TICKET FARE 9/25/2013 $797.80 c. THOMPSON, ARACELY TICKET FARE 3/12/2014 $797.16 d. AHMED, GULZAR TICKET FARE 7/29/2013 $693.80 e. HARDER, JESSE L TICKET FARE 1/16/2014 $672.00 f. HARDER, JESSE L TICKET FARE 10/8/2014 $622.20 g. MARTYN, GORDON W HOTEL 1/15/2013 $508.80 h. LEDESMA, ANTONIO HOTEL 10/24/2013 $456.00 i. ARICH, EVAN A HOTEL 3/24/2013 $373.92 j. HARDER, JESSE L HOTEL 12/11/2012 $320.74 k. AHMED, GULZAR HOTEL 7/30/2013 $320.00 For some of these expenses, no request and approval for the costs was located. For others, PB provided a "Sound Transit Travel Pre-Authorization Request"; however there is no evidence of the form being submitted to and approved by Sound Transit. Sound Transit was able to locate requests for travel, however documentation of approval was not located. These travel expenses were not approved by Sound Transit. A.9 Project 0190-10 We could not locate the approved direct labor rate for the following key personnel: a. Ben Emam (Project Manager; replaced John Harrison) b. Art Boorst (Project Manager; replaced Ben Emam) PB provided an email requesting approval for Ben Emam's rate and Art Boorst's rate. However, per response of PB, PB did not receive an email from Sound Transit approving the rates. Sound Transit unable to locate approval documentation. A request does not provide evidence that Sound Transit approved the employee's labor costs. However the approval of labor rates for key personnel is not sufficiently defined in the Agreement. 2015 RSM US LLP. All Rights Reserved. Page 12