Materials Testing
Internal Audit Practice Aid
July 2015
Program Description
State Transportation Agencies (STAs) use many types of materials on construction projects. To
ensure quality materials are used, STAs may specify required procedures for field sampling,
testing, inspecting, and controlling these materials. STAs usually develop manuals to assure
uniformity in the use and control of materials on construction projects. Projects using Federal
dollars also stipulate certain procedures to follow for materials. 23 Code of Federal Regulations
(CFR) Part 637 – Construction Inspection and Approval, requires each STA to maintain an
accredited Central Laboratory and to assure that all materials used for highway and bridge
construction conform to contract requirements.
The stated purpose of 23 CFR 637 is to prescribe policies, procedures, and guidelines to assure
the quality of materials and construction in all Federal-aid highway projects on the National
Highway System. The CFR defines an acceptable testing program, qualified laboratories and
testing personnel, quality control and other applicable policies and procedures. The quality
assurance program developed by each STA must meet the criteria in 23 CFR 637 and must also
be approved by the FHWA. STA laboratories must be accredited by the AASHTO Accreditation
Program or a comparable laboratory accreditation program. STA materials testing functions may
also participate in the AASHTO Materials Reference Laboratory (AMRL) and the Cement and
Concrete Reference Laboratory (CCRL) material inspection programs.
Statutes and Regulations
23 CFR 637 – Construction Inspection and Approval, addresses requirements for each STA to
maintain policies, procedures, and guidelines to assure the quality of materials used and for
construction in all Federal-aid highway projects on the National Highway System. In addition,
each STA may have its own specifications and requirements to ensure the quality of materials
used on construction projects.
Catalog of Federal Domestic Assistance (CFDA#)
The use and testing of materials in highway construction is included under CFDA #20.205,
Highway Planning and Construction and other related CFDA sections.
Scope and Objectives
The scope of this engagement includes a review of the materials testing procedures conducted
internally or externally for construction projects and other STA needs.
Audit Objectives
The audit objectives include the following:
Objective A: Obtain an understanding of management controls as they relate to materials testing.
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Objective B: Determine compliance with any STA rules and Federal regulations for testing and
inspecting materials, including the roles of the contractor, construction / materials inspector, and
materials tester for materials testing and payments to contractors by testing a sample of projects
to determine the following: (Requirements should be followed whether the work was performed
by STA staff or a consultant).
Objective C: Determine compliance with any STA rules and Federal regulations in regards to
materials discrepancies, including whether quantities paid on progress estimates have had
adequate materials testing and resolution of discrepancies prior to contractor payment. Verify
items failing materials testing have been replaced or corrected as required.
Objective D: Determine accuracy of materials or inspection information in management systems.
Audit Program
Objective A: Obtain an understanding of management controls as they relate to materials testing.
Step 1: Read and document understanding of STA manuals, policies and procedures for
testing materials. Determine if guidelines are periodically reviewed and updated.
Step 2: Read and document understanding of Federal guidelines for testing materials.
Step 3: Review STA procedures for ensuring Federal requirements are met.
Step 4: Interview lab directors to determine the lab’s role in the materials testing
function.
Step 5: Interview Central Office and district materials personnel to determine their roles
in materials testing. Many tests may be performed at the central office location,
while actual coring or gathering of information may occur at the district level.
Step 6: Interview materials inspectors and construction inspectors to determine their
roles in materials testing.
Step 7: Obtain an understanding of the processes involved in testing and inspecting
materials. Document any concerns pertaining to the material testing and
certification process, types of documents submitted for material certifications,
who certifies and tests materials, required timeframes for material certifications,
how testing is communicated to district offices and other personnel, and how
information is tracked or monitored. Determine controls to ensure testers are
certified. Determine who is responsible for receiving certifications and verifying
materials and certifications match. Determine the processes used for materials
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testing including the measurements performed, associated calculations and project
record documentation.
Step 8: When contractors are used for any of the processes noted, determine how their
roles coincide with those of STA personnel.
Step 9: Observe the material certification process and prepare a memorandum of your
observations regarding the process.
Step 10: Determine what reports / methods are used by Central Office or Materials
Division personnel to track progress of materials testing and determine if
backlogs exist.
Step 11: Determine source of materials information entered into the STA’s management
system.
Step 12: Obtain evidence that the STAs quality assurance program for testing materials
has been approved by the FHWA, and if annual reporting requirements are met.
Step 13: Note any efficiencies or improvements that can be made in the processes
followed from comments of personnel interviewed, review of written procedures
and requirements and observations.
Objective B: Determine compliance with any STA rules and Federal regulations for testing and
inspecting materials, including the roles of the contractor, construction / materials inspector, and
materials tester for materials testing and payments to contractors by testing a sample of projects
to determine the following: (Requirements should be followed whether the work was performed
by STA staff or a consultant)
Step 1: Determine if measurements were performed in compliance with procedures,
including associated calculations.
Step 2: Verify records are complete and appropriate to the material reported.
Step 3: Verify that the testing of the materials was performed by certified testers.
Step 4: Determine if material samples submitted for testing were reconciled to the test
results received.
Step 5: Determine certifications are reviewed and confirmed according to the material
reported.
Step 6: Determine if material certifications were signed by appropriate personnel.
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Step 7: Determine if material certifications were received within required time frames
and prior to payments being made.
Step 8: Determine if material testing results were communicated to the appropriate
district office.
Step 9: Verify tickets / invoices are properly identified according to the applicable
project and there is adequate documentation to support the quantities shown.
Step 10: Determine how or if payments for materials are made when the contractor has
not submitted proper certifications.
Step 11: Determine if payments have been made for material on hand which has not been
installed.
Objective C: Determine compliance with any STA rules and Federal regulations in regards to
materials discrepancies, including whether quantities paid on progress estimates have had
adequate materials testing and resolution of discrepancies prior to contractor payment.
Step 1: Perform a test of completeness for contracts in the project management system by
doing a forward and backward comparison with contract award information
available from design, construction or consulting administration divisions.
Step 2: Select a representative sample of projects to review. Document why
discrepancies occurred and how discrepancies in materials testing are handled or
resolved.
Step 3: Determine material discrepancies are resolved and explained in adequate detail,
and adjustments are made for failing material.
Step 4: Interview contracting and legal personnel to determine any existing cases that
resulted from overriding discrepancies, or from materials that were not tested
before they were paid. Determine if any changes to procedures or policies have
occurred as a result of cases reviewed or discussed.
Step 5: Interview lab directors, inspectors, Central Office and Materials Division
personnel to determine if changes are needed in processes to accept materials or
in overriding discrepancies.
Step 6: Determine possible repercussions to the STA and / or personnel for overriding
discrepancies in contract management, and paying on material before materials
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are tested (i.e. added requirements for testing, rip out materials at cost to the STA,
deal with sub-standard materials, etc.)
Step 7: Note any efficiencies or improvements that can be made in the processes
involved in resolving and / or overriding discrepancies.
Objective D: Determine accuracy of materials or inspection information in management system.
Step 1: Review the system utilized by management for documenting the materials testing
results and tracking materials on STA projects to ensure all information necessary
to meet Federal and STA requirements have been included in the system. (This
may be an internally developed system or purchased software such as Site
Manager).
Step 2: For the sample of material certifications tested above, trace information in the
management system to source documents to determine materials or inspection
data entered is accurate and complete.
Step 3: Determine if the responsible area is performing periodic reconciliations of data
entered into the system to the source documents to ensure its accuracy by
someone other than the party entering the data.
Step 4: Test a sample of reconciliations to ensure they were performed and any
appropriate adjustments were made in a timely manner.
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