U.S. ENVIRONMENTAL PROTECTION AGENCY 

OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Site Inspection Report 

American Recovery and 

Reinvestment Act Site Inspection 

of Water Main Extension Project, 

Manchester Water Works, 

Manchester, New Hampshire 

 Report No. 10-R-0080 

 March 17, 2010 
Report Contributors: Jessica Knight 

 Jean Bloom 

 Iantha Maness 

Cover photo: Pipes for water main extension project, Goffstown, New Hampshire. 

(EPA OIG photo) 
 

 

 

U.S. Environmental Protection Agency 10-R-0080 

March 17, 2010 Office of Inspector General 

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review 

The U.S. Environmental 

Protection Agency Office of 

Inspector General conducts site 

visits of American Recovery and 

Reinvestment Act clean water 

and drinking water projects. 

We selected a Manchester Water 

Works project for review. 

Background 

The City of Manchester, New 

Hampshire, acting by and through 

Manchester Water Works, 

received a $2,536,087 loan from 

the New Hampshire Department 

of Environmental Services under 

the Drinking Water State 

Revolving Fund program. The 

loan included up to $1,268,043 in 

Recovery Act funds for principal 

forgiveness. The purpose of the 

loan is to extend and install water 

main pipes in the Lynchville Park 

and Danis Park areas of 

Goffstown, New Hampshire. 

For further information, contact 

our Office of Congressional, 

Public Affairs and Management 

at (202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2010/ 

20100317-10-R-0080.pdf 

American Recovery and Reinvestment Act 

Site Inspection of Water Main Extension 

Project, Manchester Water Works, 

Manchester, New Hampshire 

What We Found 

We conducted an on-site inspection at Manchester Water Works, Manchester, 

New Hampshire, in October 2009. As part of our inspection, we toured the 

Lynchville Park and Danis Park water main extension project in Goffstown, 

New Hampshire; conducted interviews of City, contractor, and subcontractor 

personnel; and reviewed documentation related to Recovery Act requirements. 

Based upon our on-site inspection, nothing came to our attention that would 

require action from the City of Manchester or the U.S. Environmental 

Protection Agency. 
 

 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL 

March 17, 2010 

MEMORANDUM 

SUBJECT:	 American Recovery and Reinvestment Act Site Inspection of 

Water Main Extension Project, Manchester Water Works, 

Manchester, New Hampshire 

Report No. 10-R-0080 

FROM: Melissa M. Heist 

TO: Curt Spalding 

Regional Administrator, Region 1 

U.S. Environmental Protection Agency 

Assistant Inspector General for Audit 

This is our report on the subject site visit conducted by the Office of Inspector General of the 

U.S. Environmental Protection Agency. The report summarizes the results of our site inspection 

of a Manchester Water Works, Manchester, New Hampshire, water main extension project. 

We performed this site inspection as part of our responsibility under the American Recovery and 

Reinvestment Act. The purpose of our site inspection was to determine whether the Manchester 

Water Works, acting on behalf of the City of Manchester, complied with selected requirements 

of the Recovery Act pertaining to the Drinking Water State Revolving Fund program. The New 

Hampshire Department of Environmental Services approved the project, and the City of 

Manchester, through Manchester Water Works, received a $2,536,087 loan, including up to 

$1,268,043 in Recovery Act funds for principal forgiveness. 

The estimated cost of this report – calculated by multiplying the project’s staff days by 

the applicable daily full cost billing rate in effect at the time - is $61,185. 

Action Required 

Because this report contains no recommendations, you are not required to respond to this report. 

We have no objection to the further release of this report to the public. This report will be made 

available at http://epa.gov/oig. If you or your staff have any questions regarding this report, 

please contact Robert Adachi at (415) 947-4537 or adachi.robert@epa.gov, or Jean Bloom at 

(617) 918-1475 or bloom.jean@epa.gov. 
10-R-0080 

Purpose 

The purpose of our review was to determine whether the Manchester Water Works, acting on 

behalf of the City of Manchester, New Hampshire, complied with requirements for subrecipients 

of American Recovery and Reinvestment Act funds under the Drinking Water State Revolving 

Fund program. 

Background 

The State of New Hampshire and the City of Manchester, New Hampshire, acting by and 

through the Manchester Water Works, entered into a loan agreement under the Drinking Water 

State Revolving Fund program to extend municipal water service to the Lynchville Park and 

Danis Park areas of the Town of Goffstown, New Hampshire. Manchester Water Works is an 

enterprise fund of the City of Manchester, New Hampshire, and is governed by a Board of Water 

Commission appointed by the Board of Mayor and Alderman of the City. It is the State of New 

Hampshire’s largest water utility, responsible for providing drinking water to the City of 

Manchester and portions of Auburn, Bedford, Derry, Goffstown, Hooksett, and Londonderry. 

The City received a $2,536,087 loan from the New Hampshire Department of Environmental 

Services, including up to $1,268,043 in Recovery Act funds for principal forgiveness. 

Manchester Water Works, acting on behalf of the City of Manchester, is responsible for the 

project. 

Scope and Methodology 

Due to the time-critical nature of Recovery Act requirements, we did not perform this 

assignment in accordance with generally accepted government auditing standards. We did not 

determine whether previous audit work was completed in this area or assess the internal controls 

of Manchester Water Works or the City. As a result, we do not express an opinion on the 

adequacy of the internal controls of Manchester Water Works or the City, or the compliance of 

either entity with all federal, State, or local requirements. 

We conducted an on-site inspection on October 14-15, 2009. We limited the scope of our review 

to the following steps: 

1.	 Touring the project 

2.	 Conducting interviews of Manchester Water Works, contractor, and subcontractor 

personnel 

3.	 Reviewing documentation maintained by Manchester Water Works or its contractors 

on the following matters: 

a.	 Buy American requirements under Section 1605 of the Recovery Act 

b.	 Davis-Bacon Act wage requirements under Section 1606 of the Recovery Act 

c.	 Financial Management and Reporting Requirements under Section 1512 of 

the Recovery Act 

d.	 Contract procurement 

1
 
 

10-R-0080 

Results of Site Inspection 

Based upon our site inspection, nothing came to our attention that would require action from the 

City of Manchester or the U.S. Environmental Protection Agency. We have summarized specific 

inspection results below. 

Buy American Requirements 

We reviewed Manchester Water Works’ procedures for ensuring the materials used are in 

compliance with Buy American requirements, and no issues came to our attention. The 

contractor certified the products, and Manchester Water Works has inspectors onsite to 

verify the materials used are manufactured in the United States. 

Davis-Bacon Act 

We reviewed Manchester Water Works’ compliance with the Davis-Bacon Act, and no 

issues came to our attention. To comply with Davis-Bacon Act requirements, contractors 

signed weekly certified payrolls to certify compliance with Davis-Bacon Act rates. The 

contractors submitted certified payroll reports to the Manchester Work Works’ project 

engineer. The engineer then forwarded the payroll reports to the State. We reviewed 

certified payrolls and verified compliance with Davis-Bacon Act rates. 

Financial Management and Reporting 

We reviewed the loan agreement between the State of New Hampshire and the City of 

Manchester through Manchester Water Works and obtained an understanding of the 

expenditure payment process from Manchester Water Works’ Financial Administrator. 

No issues came to our attention. The Board of Water Commissioners approved the 

projects. The projects are being funded through the Drinking Water State Revolving 

Fund, with a portion of the funds provided under the Recovery Act. The Town of 

Goffstown has agreed to pay back the loan and there will be no cost to Manchester Water 

Works. 

We obtained copies of the Recovery Act jobs created/retained reports submitted to the 

New Hampshire Department of Environmental Services by Manchester Water Works to 

determine the process the subrecipient is using to provide information to the State to 

prepare the report required under Section 1512(c) of the Recovery Act. Based on our 

review of the reports, the information provided meets Recovery Act requirements. 

Contract Procurement 

We reviewed Manchester Water Works’ procurement of its contractors, and no issues 

came to our attention. Manchester Water Works hired a construction contractor to extend 

and install water mains in the Lynchville Park area. The construction contract was 

solicited using the sealed-bid method. The contract was awarded to the lowest bidder as 

a fixed-price contract. 

2
 
10-R-0080 

Recommendations 

We have no recommendations. 

Subrecipient’s Response and Office of Inspector General Comment 

On March 11, 2010, we held an exit conference with the New Hampshire Department of 

Environmental Services and Manchester Water Works to obtain their response to the discussion 

draft report. Both concurred with the information in the report. Both agreed the site inspection 

was a valuable and helpful experience that enhanced their understanding of the Recovery Act 

requirements. We have no further comments. 

3
 
 

 

 

 

 

 

 

1 

10-R-0080 

Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Planned 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Completion 

Date 

Claimed 

Amount 

Agreed To 

Amount 

No recommendations 

O = recommendation is open with agreed-to corrective actions pending 

C = recommendation is closed with all agreed-to actions completed 

U = recommendation is undecided with resolution efforts in progress 

4
 
10-R-0080 

Distribution 

Office of the Administrator 

Regional Administrator, Region 1 (Action Official) 

Director, Grants and Interagency Agreement Management Division, Office of Administration 

and Resources Management 

Agency Follow-up Official (the CFO) 

Agency Follow-up Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Audit Follow-up Coordinator, Region 1 

Public Affairs Officer, Region 1 

Mayor, Manchester, New Hampshire 

Distribution Coordinator, New Hampshire Department of Environmental Services 

Acting Inspector General 

5