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2017 A&E Update
Highlights from the AASHTO Subcommittee on Internal/External Audit Conference
Presented By:
Monica Miles
9/21/2017 2
Introduction>15 yrs experience in the Transportation IndustryPerformed work for: GDOT, VDOT, DDOT• Indirect Cost Audits• Accounting System Reviews• Interim and Final Cost Audits• CPA Workpaper Reviews (Cognizant Reviews)
WorkSmartNY…A Guide to Working with NYSDOT• Orientations for DBEs, MWBE, & SDVOB firms• Webinars• Project Related SessionsMonica Miles, CPA, CFE, MBA
MH Miles Company, CPA PC
• This Webinar is geared towards Architectural and Engineering firms who have or are interested in obtaining NYSDOT federal-aid contracts.– Summarize information from the July 2017 AASHTO
Conference- Subcommittee: Internal/External Audit
– Review updated NYSDOT-specific requirements for A&E firms
9/21/2017 3
Webinar Focus
4
Polling Questions
Engineering and Design Related Services, such as:
Program Management
Construction Management
Feasibility Studies
Preliminary Engineering
Design engineering
Surveying
Mapping
Architectural Related Services5
Audience
Overview of A /E Contracts
Consultant services funded in whole, or in part, with Federal-Aid highway program funds shall be procured and administered in accordance with 2 CFR 200
Contracts for engineering and design-related services that are also directly related to a planned construction project must comply with 23 U.S.C. Sec. 112 and 23 CFR 172.
6
Background
7This Photo by Unknown Author is licensed under CC BY-SA
The TWINS
• American Association of State Highway and Transportation Officials– AASHTO is a nonprofit, nonpartisan association
representing highway and transportation departments in the 50 states, DC, and PR.
– AASHTO serves as a liaison between state DOTs and the Federal government.
– AASHTO's policy development, standards setting, and technical activities are the product of volunteer state department of transportation personnel who work through the AASHTO committee structure.
8/5/2016 8
AASHTO
This Photo by Unknown Author is licensed under CC BY-SA8/5/2016 9
2017 AASHTO Subcommittee for Internal/External Audit Annual Meeting- Missoula, MT
Group Name: 2017 AASHTO Auditors Conference
Reservation Dates: July 8-July 13, 2017
Cutoff Date: Hotel full, please book overflow hotel.Booking Code: TRN
Hotel rate is $140.00 per night plus tax.
• 2 CFR 200 Impacts on State DOTs
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Conference Agenda- Key Items
• Best Practices for Cognizant Reviews
• Audit Standards
• USDOT IG- What’s New
• 2 CFR 200 Impacts on State DOTs
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– Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards
– Stewardship and Oversight Provisions (in Sub Part D)• Local governments and pass thru entities
• Risk assessment performed for monitoring of LPAs
• Enforcement action against noncompliant subrecipients
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Polling Questions
• Best Practices for Cognizant Reviews
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– Overview: Benefits of Cognizant Review to DOT
Reduces duplication of efforts
Provides assurance regarding CPA firm skills set
Results of 2016 surveys (still work to be done)
• Best Practices for Cognizant Reviews
8/5/2016 14
–Best practices for A/E firms to facilitate the review process
Communication bet. A/E firm, State DOT & CPA essential
• Pre-Audit Planning Phase
– Identify risk areas, concerns and “hot-buttons”
• Best Practices for Cognizant Reviews
15
– Best practices for performing a State DOT CPA WP Review
Communication with A/E firm & CPA
Discuss deviations in recommended course of action noted in the AASHTO Guide
Obtain completed Appendix A prior to review
• Best Practices for Cognizant Reviews
16
– Best practices for performing a State DOT CPA WP Review (continued)
Obtain the following in advance of review:ICQ
Cost certification
Audit report
Exec. Comp info
Determine whether PY findings & resolution
Perform analytics of PY rate & CY rate
• Indirect cost audits
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– Key areas:
Other Direct Cost testing
Overtime premium
Executive compensation
Adequate disclosures
• Audit Standards
18
Exposure draft period just ended in July
Updates to the Yellow Book are coming. New Yellow Book implementation in 2018
• Audit Standards
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Key proposed changes:
• New format that differentiates requirements from application guidance
• Updated internal control requirements and guidance
• Revised CPE requirements for CPAs to ensure greater auditor proficiency in GAGAS
• Revised peer review requirements for audit firms
• New requirements for reporting waste that is detected during an audit
• USDOT- What’s New
20
• Indirect cost rate of 110%• Set to expire July 31, 2017• Extended (AGAIN) till December 31, 2017
8/18/2016 21
AASHTO Guide
Purchase $13(Non-Member Price)
Google: 2016 AASHTO Audit Guide
8/5/2016 22
What’s happening in New York State?
Revised : December 30, 2016
8/5/2016 23
Required Financial Submission Prior To Selection For Engineering Services Work and Annually Thereafter
1. AASHTO Internal Control Questionnaire (ICQ) for Consulting Engineers, and supporting documentation, including:• Federal Acquisition Regulation (FAR) Audit Report
• Compliant with FAR 31 Cost Principles• Guidance available in AASHTO Audit Guide
• General Purpose Financial Statements• Balance Sheet• Statement of Income• Cash flow• Statement of Retained Earnings• Notes to Financial Statements
Revised : December 30, 2016
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Required Financial Submission Prior To Selection For Engineering Services Work and Annually Thereafter
2. Form CONR 385, NYSDOT Supplement to the AASHTO ICQ for Firms Required to File a FAR Audit Report (January 2017 version)
Revised : December 30, 2016
8/5/2016 25
Required Financial Submission Prior To Selection For Engineering Services Work and Annually Thereafter
3. Documentation of Reasonableness of Executive Compensation in accordance with Consultant Instruction 11-09
• Code: 11-04 (Revised)
• EXCEPTION:
Firms with gross income < $1M annually during 2 of last 3 yrs do not have to submit FAR audit every yr.
• Completed & Certified CONR-385N
8/5/2016 26
Required Financial Submission Prior To Selection For Engineering Services Work and Annually Thereafter
• Code: 11-04 (Revised)
AASHTO ICQ; CONR 385; CONR 385N
Can be downloaded at
https://www.dot.ny.gov/main/business-center/audit/conr-385-388
8/5/2016 27
Required Financial Submission Prior To Selection For Engineering Services Work and Annually Thereafter
WorkSmartNY Acknowledgements
Ms. Sondra LittleNYSDOT- Director OCR
Ms. Jackie Jones NYSDOT- D/M/WBE SS and OJT Program Manager
8/5/2016 29
Questions
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