Each consultant who anticipates performing services for the North Dakota Department of Transportation (NDDOT) is required to submit an overhead (indirect) cost rate. The indirect cost rate must be compiled and audited in accordance with cost principles contained in the Federal Acquisition Regulations (FAR) of part 31 of title 48, Code of Federal Regulations (CFR). Firms proposing to do work for the NDDOT should have a current audit rate no older than 12 months from the close of the firm’s fiscal year to ensure rates reflect the most recent costs.
Indirect cost rate audits may be performed by a CPA, an agency of the Federal government, another state highway agency or similar audit agency. All audits shall be subject to review and / or modification by the NDDOT Audit Services Division for compliance with the FAR. NDDOT Audit Services will complete a review of the CPA working papers and report when applicable, in accordance with the American Association of State Highway and Transportation Officials (AASHTO) Uniform Audit & Accounting Guide. NDDOT Audit Services therefore requires access to CPA audit working papers to conduct the review and issue its acceptance of the audited rate. A cognizant audit performed by another state highway agency will be accepted in the absence of a CPA audit report.
Audits of indirect cost rates should be conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and the AASHTO Audit Guide. The cost of CPA audits is allowable in the indirect cost rate; the cost of a rejected CPA audit is not an allowable cost. As part of the indirect cost rate audit, engineering firms will need to provide a completed:
Facilities Capital Cost of Money (FCCM) will be approved separately from the indirect cost rate when calculated on the indirect cost rate report. Fixed fees cannot be calculated on the FCCM according to FAR paragraph 15.404-4(c)(3). FCCM is to be calculated on direct labor only and listed separately on the cost summary sheet.
23 CFR part 172 was revised effective June 22, 2015 requiring consulting engineers to certify that the final indirect cost rate is allowable in accordance with the Federal cost principles. NDDOT will therefore require consulting engineers to submit a certification form when contracts are signed.
Any questions regarding audits of indirect cost rates can be sent to Terra Miller-Bowley, Audit Services Division. Questions regarding contract submittals and award procedures can be sent to Steve Cunningham, Consulting Administrative Services.