(a) Resident inspection.

1. (1) The borrower shall provide for full-time inspection of the project by the consulting engineer or the borrower’s engineering staff.

2. (2) This will be done to ensure the work is being performed according to:

   1. (A) The approved plans and specifications;
   2. (B) The approved change orders; and
   3. (C) Sound engineering principles and building practices.

(b) Arkansas Natural Resources Commission staff inspection.

1. (1) The Arkansas Natural Resources Commission staff is authorized to conduct engineering and financial inspections of each project financed in whole or in part with CWRLF funds.
2. (2) During normal business hours, construction and financial records of the project shall be made available to commission staff representatives to assure that all program and contractual requirements are met.
3. (3) The contractor and borrower shall furnish the commission staff representatives with every reasonable facility for finding out whether the work as performed is according to the requirements and intent of the contract.

4. (4)

   1. (A) The commission staff shall notify the borrower and the consulting engineer of any observed deficiencies in the completed construction, procedures, or materials used in construction, resident inspection, engineering supervision, financial management, or any violation of loan program requirements.
   2. (B) The commission staff will require the borrower to take such action as may be necessary to correct any such observed deficiency.

(c) Engineering inspection.

1. (1)

   1. (A) An engineering inspection of the project will be periodically conducted by commission staff representatives.
   2. (B) The inspections will be done to ensure that the project is:

(i) Being managed properly;

1. (ii) On schedule; and

   1. (iii) Being constructed according to approved:

(b) (b) Specifications; and

1. (c) (c) Change orders.

   1. (C) Commission staff representatives will also decide if the engineering consultant's estimate of work complete agrees with actual observed construction.
   2. (D) The staff will decide if materials and equipment delivered to the site are properly stored and meet contract requirements.
   3. (E) The staff will also decide if other program requirements are being met.

2. (2)

   1. (A) Besides normal testing procedures required of the borrower, the commission staff may require additional tests of building materials or processes.
   2. (B) These tests would only become necessary as the result of some problem during the building of the project.
   3. (C) All tests will conform to current published American Society of Testing Standards.

3. (3)

   1. (A) Such inspection will not release the contractor from any obligation to do the work according to the requirements of the contract documents.

   2. (B) The consulting engineer would also still be responsible for determining compliance with the requirements of the contract documents.

      1. (d) Financial inspection.
4. (1) A financial inspection of the project will be periodically conducted by commission staff representatives.

5. (2) This inspection will include, but not be limited to, a review of:

   1. (A) All project files;
   2. (B) All documents that substantiate project expenses;
   3. (C) Project accounting records; and
   4. (D) Records on the revenues and expenses of the sewer system.
6. (3) Inspections shall be of sufficient scope and detail to determine conformance with terms and provisions of the bond purchase agreement and the requirements of this part.