1. (a) The executive administrator is also authorized to inspect all materials furnished, including inspection of the preparation or manufacture of the materials to be used. A resident engineer or inspector may be stationed at the building site by the executive administrator to report on the manner and progress of the building or to report conditions relating to the materials furnished and the compliance by the contractor with approved contract documents for the project. Such inspection will not release the contractor from any obligation to perform the work in accordance with the requirements of the contract documents or the project engineer from determining compliance with the requirements of the contract documents.
2. (b) In the event building procedures or materials are determined by the executive administrator to be substandard or otherwise unsatisfactory and/or not in conformity with approved contract documents, the executive administrator may order the applicant to take such action through the project engineer in the manner provided for in the construction contract to correct any such deficiency.
3. (c) In those instances of dispute between the applicant's project engineer and the executive administrator's representative as to whether material furnished or work performed conforms with the terms of the construction contract, the executive administrator may order the applicant to direct the project engineer to reject questionable materials and/or initiate other action provided for in the construction contract, including suspension where necessary, until all disputed issues are resolved in accordance with the terms of the construction contract.
4. (d) The contractor and applicant shall furnish the executive administrator's representative with every reasonable facility for ascertaining whether the work as performed is in accordance with the requirements and intent of the contract.

5. (e) The executive administrator is authorized to conduct engineering and financial audits of every project which is financed in whole or in part by SRF funds. For purposes of this section, the following definitions are applicable.

   1. (1) Financial audit--A review of all the board's files for historical background for the project, a visit to the project offices or site to gather sufficient information to perform a detailed review of documents which substantiate the project expense, a tabulation of expenses, and issuance of an audit report to document the findings for the purpose of establishing that expenses financed from the fund are in conformance with terms and provisions of loan documents.
   2. (2) Engineering audit--A physical inspection of the project to analyze and compare the project with the approved contract documents, resulting in the issuance of a technical report which itemizes any variances from the construction contract and approved contract documents and recommends corrective action.
6. (f) In addition to normal testing procedures required of the applicant, the executive administrator may require reasonable additional tests of building materials or processes which the executive administrator determines to be necessary during the building of projects financed in whole or in part by SRF funds. All tests, whether for the executive administrator or the project engineer, will conform to current American Water Works Association, American Association of State Highway and Transportation Officials, American Society of Testing and Materials, and Texas Department of Highways and Public Transportation published procedures, or similar criteria. The executive administrator shall specify which tests are applicable. Samples for testing shall be furnished free of cost to the executive administrator upon request on the construction site.

Source Note:The provisions of this §375.83 adopted to be effective February 25, 1988, 13 TexReg 791; amended to be effective April 21, 1989, 14 TexReg 1749.