administrative qualifications & precertification...•work category list can be found on the...
TRANSCRIPT
2017 PEPS Conference
ADMINISTRATIVE QUALIFICATIONS & PRECERTIFICATION2017 PEPS Conference
Bruce Reed│ Roy Gonzales
November 3, 2017
2017 PEPS Conference
Table of Contents
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Most Important Expense
General & Other Expenses
Cost Accounting Standards
Related Party Transactions
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22
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Precertification55
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Administrative Qualifications
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Purpose of reviewing expenses is to determine which expenses are allowable as to cost under Federal
Acquisition Regulation (FAR) 31
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• FAR 31.201—3 Defines Reasonable Cost as:• A cost is reasonable if, in its nature and amount, it does not exceed that which
would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
• The main focuses of testing is to determine the reasonableness of the expense and that there is adequate documentation and explanation to support the expense.
• Just because the expense may be determined to be reasonable as a cost, there must be adequate documentation and explanation to support the expense.
• If there is inadequate documentation and explanation to support the expense, then the expense will be disallowed.
• Adequate documentation is original invoices, receipts, agenda of meetings with notes, all invoices and receipts must have purpose, time, place, names (not initials) of cost. Credit card, bank card statements and expense reports and not acceptable.
• TxDOT staff works with the Consultants and the CPAs in order to establish a reasonable Indirect Cost Rate.
FAR Requirements and Reasonable Cost
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Indirect Labor Cost
Most Important Expense
Did the company overcharge this account? Is indirect labor greater than direct labor?
Need to conduct testing for reasonable assurance that the indirect labor cost was correct.
Testing consists of the following:
• Was labor properly calculated and assigned to cost objectives based on hours recorded?
• Were hours properly recorded and allocated to indirect cost objectives?
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Most Important Expense (continued)
• Was total labor costs recorded in payroll system (payroll ledger)?
• Was payroll properly reconciled to job cost accounting system?
• Was payroll recorded in the General Ledger?
• Was payroll reconciled to GL, 940, 941 and W-2s?
• Was labor cost incurred for unallowable activities properly identified and segregated from labor cost incurred for allowable activities?
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General Expenses
AASHTO Audit and Accounting Guide has established a potential list that must be reviewed 100% for allowable cost. These accounts are considered High Risk Accounts:
Printing and Reproduction
Employee Morale
Professional and Consultant Services Costs
)Insurance (Purchased and Self Insurance)
Rent
Dues and Subscriptions
Travel Costs and Airfare
Seminars and Conventions
Depreciation
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Large Dollar Amount
AASHTO audit and accounting guide requires a review of all Large Dollar Amount expenses for reasonableness and to ensure there is adequate documentation and explanation to support the expenses.
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Other Expenses
Other expenses that are tested for allowable cost are:
Advertising
Maintenance and Repairs
Marketing
Taxes
Automotive expenses
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Cost Accounting Standards
CAS of OMB-A-87(Federal Timekeeping Requirements); A-133(Cost Accounting)
Generally Accepted Auditing Standards
GAGAS (Yellow Book)
The expenses must comply to these standards in order to be allowable as a cost for the overhead rate.
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Related Party Transactions
Related Party Transactions can take many type of forms. Examples:
Building owned by an individual that also owns the consulting firm
Cleaning service that is owned by the consulting firm
Equipment rental company owned by consulting firm
Agreements between subsidiary companies and/or affiliate companies
These transactions have to be an arm’s-length transaction without conflict of interest on both parties
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Precertification
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What is the Precertification Program?
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A vital part of the TxDOT professional services contracting program
An eligibility requirement for individuals who want to work on TxDOT professional services contracts
An acknowledgement that individuals meet minimum qualifications
A way to eliminate the submittal of lengthy qualification information in response to each solicitation
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Precertification Program Details
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•16 work groups•78 work categories•Work category list can be found on the TxDOT external
website
Precertification work category stats:
•Firm submits qualifications for individuals in specific categories
•Designated review officers determine precertification•Firm is only precertified in a specific category if it employs
an individual who is precertified in that category•Renewal period is January through March of each year•Processing can take up to 60 days
Precertification process:
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Precertification Work Category Format
Note: these are the minimum technical requirements
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Category description
basic description of type of work
Certification requirements
professional qualifications
experience
education
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Precertification Program Update
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TxDOT steering committee has evaluated:•Existing categories and required qualifications•Incorporate the standard non-listed work categories
(NLCs)•Incorporate NLCs that have been used frequently
Outcome of evaluation:•Some existing categories will be combined or
merged•22 existing categories will no longer be used•52 new categories will be added
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Modifications to CCIS are already underway
•Email to TxDOT PMs and consultants •List of categories•Summary of the changes and how they impact each category and the
individuals who are already precertified in certain categories
Additional information will be provided:
TxDOT will begin precertifying individuals in the new categories
TxDOT will continue using the existing categories and NLCs while precertification applications are processed on new categories
Precertification Program Update (continued)
Don’t panic !
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Helpful Links
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• TxDOT website: www.TxDOT.gov
• Administrative Qualification website:http://www.txdot.gov/business/consultants/architectural-engineering-surveying/getting-started/administrative-qualification.html
• Administrative Qualification List:http://ftp.dot.state.tx.us/pub/txdot-info/des/cco/professional_services/qualified_firms.pdf
• Texas Administrative Code (TAC) 9.34 thru 9.37 website:http://texreg.sos.state.tx.us
• Pre-Certification website:http://www.txdot.gov/business/consultants/architectural-engineering-surveying/getting-started/precertification.html
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TxDOT Precertification Contact
Paula McGinley (Primary)(737) [email protected]
CCIS Access Request Submittal [email protected]
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Angela Yokie (Back-up)(512) [email protected]
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Administrative Qualifications Contacts
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AQ Process [email protected]
Bruce Reed(512) [email protected]
Angela Yokie(512) [email protected]
Arturo Salinas(512) [email protected]
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TxDOT Precertification Contact
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Roy Gonzales (512) 416-2034
If there is an escalation in any of the Business Operation Center
(BOC) sections or programs
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Questions and Discussion