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Frequently Asked Questions

Q. Do the consultant submission requirements apply to sub-consultants?
A: Yes, these requirements apply to both prime and sub-consultants.
Q. When do the new overhead/direct cost requirements go into effect?
A: The submission requirements go into effect immediately for the 2014 consultant audit period. The six (6) month due date requirement will go into effect for the 2015 consultant audit period.
Q. Where should the completed Overhead Audit Reports and Settle-Up Schedules related to Direct Costs be sent?

All Overhead audits and Direct Cost schedules, including all contracts where the firm performed both as a prime consultant and as a sub-consultant, should be e-mailed to the New Jersey Department of Transportation (NJDOT) at NJDOT.AUDIT@dot.nj.gov within six (6) months of the completed fiscal year. The direct cost submission must include the Excel version of the "Schedule of Billed Costs and Fees" template along with a signed, scanned version of this template in a Portable Document Format (pdf) file. The "Consultant Agreement Modification (CAM) Detail" tab/schedule within the template should reflect any direct cost adjustments, as well as, adjustments to overhead based on the audited or approved (for exempt firms) overhead rates. All adjustments must be identified to the basic agreement and the appropriate CAM and Task Order. NJDOT will review each submission and will formally notify the firm of its acceptance or of any needed revisions (all revisions must be provided within ten (10) business days of notification).

Upon final acceptance, the firm will be advised of any amounts due to NJDOT or due to the firm. A summary schedule which identifies the amounts by contract and CAM/Task Order will be provided. The NJDOT provided schedule will also identify the appropriate prime consultant on those contracts where the firm performed as a sub-consultant. Payment for all monies due to NJDOT for agreements where the firm performed as the prime consultant should immediately be forward to:

NJDOT Cashier
1035 Parkway Avenue
PO Box 600
Trenton, NJ 08625-0600

The payment should be accompanied by a copy of the supporting summary schedule. For those contracts where the firm was a sub-consultant, a copy of the "CAM Detail" tab for contracts pertaining to the prime consultant and proper payment should be immediately forwarded to the appropriate prime consultant. The prime consultant is responsible for the payment to the NJDOT Cashier. For any amounts that are due to the firm, a Payment Voucher can be submitted to the applicable NJDOT Contract Manager, or to the prime consultant for forwarding to the Contract Manager. Payment will be limited to the contract/CAM/Task Order ceiling.

Q. What happens if the required Overhead and Direct Cost Schedules, are not submitted according to this schedule?
A: Failure to submit to the NJDOT within six (6) months of the close of the firmís fiscal year may result in the suspension of new contracts or Consultant Agreement Modifications (CAMs) awarded to the firm. This will remain effective pending the firmís compliance.
Q. Will a Federal Acquisition Regulations (FAR) audit done by a cognizant Federal agency, or another State Department of Transportation, be acceptable to NJDOT?
A: Yes, as long as the required cognizant agency letter of concurrence is provided.
Q. Is there a recommended list of Certified Public Accountant (CPA) firms who do this type of work?
A: NJDOT cannot legally provide a recommended list of CPA firms. However, any independent licensed CPA firm who has experience performing audits in accordance with Generally Accepted Government Auditing Standards (GAGAS) and FAR, Subpart 31 experience would be qualified.
Q. Are there any rules regarding the procurement or selection of CPA firms to perform this work? Is there any limitation on cost?
A: A licensed and experienced firm must be selected, as noted above. There are no specific rules regarding the procurement of a CPA firm. There are no restrictions regarding the location of the CPA firm, and it is acceptable to use a firm that already performs its financial statement audits. It would be prudent to hire a CPA firm that has undergone the required peer review before enlisting its services, given that this is required per the GAGAS. Overall, the cost must be reasonable in relation to the services performed.
Q. Is reimbursement allowed for the cost of these audits?
A: Yes, the cost of the overhead audits is allowable in the consultantís overhead rate calculation and can be billed through increased charges across all contracts.
Q. If jobs are closed but the costs have not yet been audited, can they be reopened for the purposes of charging these costs?
A: Yes, jobs that are reopened for this purpose will not be included on the Professional Services database of active projects.
Q. Can I still be audited by the NJDOT-hired CPA firms, if I prefer to do so?
A: No, once a consultant or sub-consultant reaches or exceeds the NJDOT Disadvantaged or Emerging Small Business Enterprise, or State of New Jersey Small Business Enterprise Categories 1 and 2 thresholds, an NJDOT-hired CPA firm will not perform the required Overhead audits.
Q. When the consultant determines that an overpayment situation exists, can the overpayments be reimbursed to NJDOT on an installment basis? Can adjustments be combined?
A: NJDOT will consider proposals for installment payments. Proposals must be submitted to the Manager of Auditing for approval. Requests should include the total amount due and a schedule for repayment, and provide for a concurrence signature. One check can be sent for all amounts owed NJDOT, but the firm must provide a schedule detailing separately the amounts owed by contract and CAM.
Q. How will the Direct Cost Settle-Up process deal with sub-consultants for amounts due?
A: Settle-Up documents should be submitted by the sub-consultants to the appropriate prime consultant along with any payment amounts due NJDOT, only after final review and formal acceptance by NJDOT. The prime consultant must then forward the schedules and any payment due NJDOT to the NJDOT Cashier. As noted previously and as detailed in External Audit Circular Number 2, the entire direct and indirect cost audit submission must be provided to NJDOT.
Q. Can the consultant bill for additional hours if, as a result of the audit, the adjusted cost is below the contract ceiling?
A: All hours must be negotiated and approved by the Contract Manager. The consultantís firm should identify all costs currently incurred on a project, rather than inform the Contract Manager years later of additional costs.
Q. What constitutes a Quality Assurance Review (QAR)? Will NJDOT formally approve the audited overhead rate and notify the consultant?
A: NJDOT will review the reports and working papers of the consultant-hired CPA firms to assure that the audits have been performed in accordance with GAGAS, Title 48 Part 31 of the FAR, the specific contract provisions, as well as the applicable State of New Jersey Circular Letters.

The recommended Audit Work Program should be used by the consultant-hired CPA firms to assure that all of the required steps are performed. For further guidance, the American Association of State Highway Transportation Officials (AASHTO) Audit Guide should be used. If the audit meets the requirements of the established audit criteria, the consultant will be notified by NJDOT that it has been accepted.
Q. What happens if a consultant receives notice of a failed QAR?
A: The consultant will be required to correct all deficiencies noted in the QAR within 30 days. Additional costs related to the correction of these deficiencies will not be eligible for reimbursement.
Q. What happens if a consultant fails to resolve QAR deficiencies within the timeframe allowed?
A: If a consultant fails to resolve the deficiencies within the 30 day period, it will not be in compliance with the NJDOTís audit requirements, and is ineligible for reimbursement on any NJDOT Contracts/CAMs until all cited deficiencies are corrected.
Q. Can I send the firm prepared Overhead Rate to NJDOT by e-mail?
A: Yes, NJDOT requires electronic submission. The complete package should be e-mailed to NJDOT.AUDIT@dot.nj.gov.
Q. Are the current New Jersey Department of the Treasury requirements for contracted Auditing Services available?
A: The current Auditing Services contract is available on the New Jersey Department of the Treasury Web site. Search term contracts by term contract number ďt2458Ē.
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  Department of Transportation
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  Trenton, NJ 08625-0600
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  Last Updated:  September 19, 2017