The 6-month FROE — and the offset consequences for missing it
The Final Report of Expenditures (FROE) framework. Six-month deadline, the April-1 lapsing-funds override, eight exhibit components, the 180-day discrepancy clock, the 30-day State Controller offset. Plus structures completion reporting and R/W close-out via Form FM 1592A.
Where Ch 17 sits — Ch 15-17 form the construction triad
LAPM Chapters 15, 16, and 17 together cover the construction lifecycle. Ch 17 covers project completion — used mainly as a guide for administration of Federal-aid contracts by LPAs under a Local Agency-State Agreement.
The Resident Engineer should be familiar with the contents of this chapter and Ch 15 and Ch 16 before administering such contracts.
When a locally sponsored project funded with Federal-aid is within the State R/W and the State is the administering agency, the Caltrans Construction Manual is used in lieu of these procedures.
RE-stamped, identified, forwarded to Division of Structures
On locally administered contracts, the RE must provide the DLAE a set of original record drawings of all structure work with As-Built corrections, or a clear, readable, black-line copy of the original tracings with As-Built corrections.
As-Built corrections must be made by the engineer responsible for structure work. Each sheet of the As-Built plans must be clearly identified with an As-Built stamp.
All plan sheets, whether they contain changes or not, must have (at a minimum):
- The name of the RE
- The Construction Contract Acceptance date
- The Contract Number
The DLAE forwards them to the Division of Structures with a copy of Exhibit 17-J: Report of Completion of Structures on Local Streets and Roads. Must be returned to the LPA after microfilming, if requested. As-Built corrections for the roadwork portion of the plans should be recorded in accordance with LPA requirements.
For projects with structures, two copies of Exhibit 17-J (and the Exhibit 17-I cover letter) must be included in the FROE. This information is necessary to incorporate all bridges into the statewide inventory and maintenance management system.
Six months, eight exhibits, one signature
The LPA is responsible for preparing and submitting to the DLAE the final report documents which collectively constitute the Final Report of Expenditures (FROE). This report provides key information required to initiate timely project closure and payment.
Override: "If the submittal deadline occurs in the year funds will lapse, the FROE must be submitted to the DLAE by April 1 of that year." Lapsing funds = federal authority that expires if not invoiced. April 1 gives Caltrans enough lead time to process the invoice before the federal fiscal year close on September 30.
The FROE must be signed by the public employee in responsible charge of the project. Cannot be consultant-signed.
Federal-aid FROE Components
Component Details
| Item | Detail |
|---|---|
| Exhibit 17-A | Cover Letter and Federal Report of Expenditures Checklist. Identifies all mandatory documents. Submitted with the FROE. Copies of all documents must be maintained on file at the LPA for any future audits as specified in the Master Agreement and Program Supplement. |
| Final Invoice | Conforms to LAPM 5-A format. Submit one original. Must agree with Final Detail Estimate. Even if all funding has been disbursed, a final zero-dollar invoice must be submitted. |
| Exhibit 15-M Final Detail Estimate | Same format as the Award Package Detail Estimate, labeled "Final," showing total of previous progress payments plus the final invoice. If claims are still pending, the final detail estimate should not be prepared until the claims are resolved. Must agree with the final invoice. State costs (e.g., state material testing) should not be included. |
| Exhibit 17-E Change Order Summary | Required regardless of whether COs were made (note "none" if not). Must include: (1) Liquidated Damages — days charged, $/day, total; (2) Contractor's Claims — note "none" if none; (3) Date of Acceptance. LDs must also be shown on Final Invoice and Final Detail Estimate. |
| Exhibit 17-F / 17-F1 | Final Report — Utilization of DBE & First-Tier Subcontractors (or 17-F1 for On-Call Contracts). Must conform to Ch 9 requirements. Required with FROE for construction (or as specified for consultant contracts). Recall the $10,000 withhold per Ch 16 if not submitted within 90 days of contract acceptance. |
| Exhibit 17-O | DBE Certification Status Change. Required with FROE. If no change, state so. |
| Exhibit 17-H | Cover Letter and Final Report of Expenditures Checklist (PE only). Submitted in place of Exhibit 17-A for projects authorized for PE only and not advancing to R/W or construction. |
| Exhibit 17-I & 17-J | Sample Cover Letter for the Report of Completion of Structures, and Report of Completion of Structures on Local Streets and Roads. For projects with bridges or other major structures. Include 2 copies in FROE. Forwarded by DLAE to Division of Engineering Services, Office of Structures Maintenance and Investigations Local Assistance Branch — incorporates bridges into statewide inventory. |
| Exhibit 17-K | Report of Completion of R/W Expenditures. For projects with R/W expenditures. Submitted when final R/W costs are known to expedite audit and reimbursement. Must include: parcel list; final maps; breakdown of R/W costs (participating shown separately, equal to Form FM 1592A "Participating Costs to Date"); final invoice for R/W on agency letterhead with funding authority dates, expenditure period, cost breakdown (Total Cost to Date, Rental Income, Nonparticipating, Participating, Previously Claimed, Change, Reimbursement Ratio, Amount, Invoice Total). |
| Exhibit 17-L | Sample Report of Expenditures for Force Account Projects. Used for emergency relief / emergency repair work and projects using force account method. See Ch 12 §12.4 Method of Construction. |
The DLAE must perform a review of these documents for correct format and obvious errors and/or omissions. Upon verification that the FROE is complete, the DLAE must forward it to Caltrans Local Programs Accounting (CLPA) for processing.
When state funding is exclusive — and the trap when it isn't
For state-funded projects the LPA must complete Exhibit 17-M: Final Project Expenditure Report. The report with the final invoice attached will be submitted to the DLAE. The DLAE verifies project completion, signs the report, and forwards to HQ Division of Local Assistance.
The trap: an LPA that thinks it's running a "state-only" project may discover late in execution that Caltrans converted it to Federal-aid for budget reasons. The procedural requirements then snap back to the full Ch 9/15/16/17 federal stack — including DBE goal, certified payrolls, FHWA-1391, Buy America, NEPA, R/W certification. Better to assume federal procedures throughout for any project in a program that has had federal money in the past 5 years.
180 days → bill → 30 days → State Controller offset
Sanctions may be imposed by Caltrans on LPAs that are found in noncompliance with the FROE reporting requirements.
Final Invoice / Final Detail Estimate Discrepancy
If there is a discrepancy between the Final Invoice and Final Detail Estimate:
- The LPA is notified by phone that a discrepancy exists
- Payment is delayed until it is resolved
- If the problem cannot be resolved within 180 days, CLPA must bill the LPA for ALL expenditures made on this project
- If the LPA does not pay the accounts receivable bill within 30 days, CLPA must initiate action with the State Controller to offset funds due the LPA
Overbilling and Non-Reimbursable Items
If the LPA has previously included in their billing items not reimbursable by FHWA, or over-billed progress payments that exceed the Final Estimates:
- The LPA must be billed for the overpayment
- The LPA must pay the State's accounts receivable bill within 30 days
- If not paid in 30 days, CLPA must initiate action with the State Controller to offset funds due the LPA
The same policy applies to Process Review Reports findings or improper DBE utilization. Process review findings of unallowable costs follow the same bill → 30 days → offset path.
The bill itself is non-negotiable once the 180-day discrepancy or 30-day overpayment window has elapsed. The only escape is to resolve the discrepancy before the clock runs out. The bill is for "ALL expenditures made on this project" — not just the disputed amount.
See LAPM Ch 20: Audits and Corrective Actions for the broader sanctions framework when process review findings escalate.
Twelve questions on Chapter 17
FROE timing, components, signature, structures and R/W close-outs, and the non-compliance offset doctrine.
- LAPM Ch 17 (2026) · the primary source
- 23 CFR Part 635 Subpart D
- 23 CFR Part 637 Subpart B
- 23 CFR §640.113
- 49 CFR Part 26 · DBE program
- Caltrans Construction Manual
- FHWA Construction Administration Group
- LAPM 5-A · Local Agency Invoice
- Exhibits 15-M, 17-A, 17-E, 17-F, 17-F1, 17-H, 17-I, 17-J, 17-K, 17-L, 17-M, 17-O
- Form FM 1592A · Final Progress Request for R/W
- LAPM Ch 5 · Invoicing
- LAPM Ch 9 · Civil Rights and DBE
- LAPM Ch 12 · PS&E (Force Account)
- LAPM Ch 15 · Advertise and Award
- LAPM Ch 16 · Administer Construction Contracts
- LAPM Ch 20 · Audits and Corrective Actions