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Table of Contents
I. ADMINISTRATIVE QUALIFICATION PROCESS
Introduction
Administrative Qualification Requirements
Qualifying Auditors
Salary Rates and Job Classifications
Direct Cost Billing Rates
Submission of Audit Report and Subsequent Review
II. INDIRECT COST RATE GUIDANCE
Introduction
Differences Between TxDOT and AASHTO Requirements
III. APPENDIX
Federal Rules and Regulations (Part 31)
I. ADMINISTRATIVE QUALIFICATION PROCESS
Introduction
As detailed in the administrative qualification process described in Section
9.42 of Title 43, Texas Administrative Code, both prime providers and
subproviders are required to submit to TxDOT an indirect cost rate audit. In
order to fulfill this requirement the audit submitted cannot be for a fiscal
year which ended more than 18 months prior to selection as a provider.
Prospective providers may submit administrative qualification information prior
to being selected but must submit it after selection and before contract
execution. An audit is not required for contracts less than $250,000. However,
the provider must adequately support all proposed costs. Exempted from this
administrative qualification process are non-engineering firms and the following
types of rate based contracts.
Bridge Inspection (Group 6)
Materials and Inspection and Testing (Group 12)
Geotechnical Services (Group 14)
Surveying and Mapping (Group 15)
Architecture (Group 16)
Administrative qualification information is for TxDOT use. This information will
only be released with the approval of the provider or as required by state or
federal statute.
Administrative Qualification Requirements
Qualifying Auditors
The indirect cost rate audit must be performed by an independent Certified
Public Accountant licensed to practice in the state where the audit will be
performed, an agency of the Federal Government, another state transportation
agency or a local transit agency. If the audit is performed by an independent
Certified Public Accountant, the provider or subprovider must assure that the
TxDOT Audit Office will be given access to the auditor work papers.
Salary Rates and Job Classifications
Current salary rates, range of rates or average rates by job classification must
be provided. These rates must be based on actual pay rates with no burden added.
Direct Cost Billing Rates
If non-salary costs are to be billed directly the billing rates must be
provided. These costs are pass-through expenses and the billing rates must not
include interest or profit.
Submission of Audit Report and Subsequent Review
The audit report can be submitted prior to selection as a provider but must be
submitted after selection. The audit report cannot be for a period which ended
more than 18 months prior to selection. Submit administrative qualification
information to:
TxDOT Audit Office
125 E. 11th Street
Austin, TX 78701
The Audit Office will review the submitted information for completeness and
compliance with all regulations and requirements. The results of the review will
be forwarded to the provider.
II. INDIRECT COST RATE GUIDANCE
Introduction
The American Association of State Highway and Transportation Officials (AASHTO)
has published a
Uniform Audit
and Accounting Guide for Audits of Transportation
Consultants’ Indirect Cost Rates [pdf, 72 pages, 850kb]. Assistance and consultation was provided by
the Southern Resource Center of the Federal Highway Administration (FHWA) and
the American Council of Engineering Companies (ACEC) Transportation Committee in
the development of this guide. The guide is sufficient when auditing an indirect
cost rate for TxDOT administrative qualification purposes.
Differences Between TxDOT and AASHTO Requirements
The AASHTO guide requires the use of Generally Accepted Auditing Standards (GAAS)
and Government Auditing Standards (GAGAS) which require an additional report on
internal controls.
TxDOT requires the use of GAAS but does not require the use of GAGAS and
therefore, does not require a report on internal controls.
The AASHTO guide only recommends the use of direct labor cost as the allocation
base for allocating indirect costs when administering State Highway Agency
engineering contracts.
TxDOT requires the use of direct labor cost as the allocation base for
allocating indirect costs.
III. APPENDIX
Federal Acquisition Regulation Part 31(Contract Cost Principals and Procedures)
The Federal Acquisition Regulation provides guidance on what types of costs are
allowable or unallowable as either direct or indirect charges to government
contracts. The most current version of the regulation can be found at this
web address.
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