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Self-certification may be conducted by the provider and must include a cost report and an internal controls report. The self-certified cost report must comply with the current versions of the following:

The self-certified internal control report must certify the provider has internal controls in place within its organization. Both the cost report and the internal control report must be signed by a company officer and notarized.

NOTE: Although the cost report information is to be developed in compliance with GAGAS, the cost report is not an audit.

The audit or self-certification shall be based on the provider's fiscal year. The indirect cost rate, as approved by PEPS the Administrative Qualifications Group, shall become effective six months after the end of the provider's fiscal year, or immediately if filed more than six months after the end of the provider's fiscal year. It shall be effective no more than 12 months and shall expire eighteen months after the end of the fiscal year upon which it is based.

A provider must submit on an annual basis a compensation analysis for all executives in accordance with the AASHTO Uniform Audit and Accounting Guide.

The department may audit the indirect cost rate of a provider under contract with, or seeking to do business with, the department. These audits will be conducted in accordance with the criteria outlined in the rules.

A provider must submit a signed certification of Final Indirect Costs with the audit report or self-certification. The certification must follow the requirements of the Federal Highway Administration.

Administrative qualification is applicable only to the incorporated business entity upon which the indirect cost rate is based and does not extend to a subsidiary, affiliate, or parent of the incorporated entity, except as provided for in Texas Administrative Code Section 9.34(b)(4), as well as sections 9.35(b), 9.38(b), and 9.39(b), as applicable.

PEPS AQ Administrator