Department of Transportation

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On-Site Direct Cost Reviews

On 12/14/16 effective for the 2016 accounting period, the NJDOT Bureau of External Audit (BEA) enacted a policy change that no longer required a consultant to hire an independent CPA firm to conduct an audit of annual direct costs. The policy change only requires a self-prepared direct cost submission from the consultant on an annual basis. As a result and since a direct cost audit is no longer required, the BEA will review and test a sample of certain consultant direct costs to gain reasonable assurance that these costs are supported and allowable.

If selected for an on-site direct cost review, an engagement letter and review notification will be sent to the consulting firm via email. The signed engagement letter is due within two (2) weeks from receipt date of NJDOT BEA initial notification of the upcoming review. All firms should be prepared to provide supporting documentation at their accounting record location for testing, which includes but is not limited to the following: employee timesheets, payroll reports, original vendor invoices, expense reports, and project cost reports.

After completion, an exit conference call will be performed with the consultant to discuss the results of the review. The consultant must submit a signed exit conference form response within five business days of the exit conference date. If there are findings and/or recommendations as a result of the review, the consultant may be required to complete a corrective action plan and make any necessary adjustments to their accounting records. Any additional consultant costs related to correcting cited deficiencies will not be eligible for reimbursement.

Last updated date: January 27, 2020 3:04 PM