administrative qualifications & precertification...•work category list can be found on the...

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) 300-7161Paula.McGinley@txdot.gov

CCIS Access Request Submittal MailboxPEPS_CCIS_Precert@txdot.gov

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Angela Yokie (Back-up)(512) 416-2726Angela.Yokie@txdot.gov

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Administrative Qualifications Contacts

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AQ Process BoxPEPS_Admin_Quals@txdot.gov

Bruce Reed(512) 416-2315Bruce.Reed@txdot.gov

Angela Yokie(512) 416-2726Angela.Yokie@txdot.gov

Arturo Salinas(512) 416-3046Arturo.Salinas@txdot.gov

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TxDOT Precertification Contact

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Roy Gonzales (512) 416-2034

Roy.Gonzales@txdot.gov

If there is an escalation in any of the Business Operation Center

(BOC) sections or programs

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Questions and Discussion