23 Apr

The Cost of Compliance – Part 2

In our last newsletter, we talked about some of the internal activities an A/E firm should perform to support their FAR compliance and development of an accurate overhead rate. These activities include developing the necessary policies and procedures, performing monthly reconciliations, reviewing costs for FAR compliance both as they are incurred and periodically throughout the year, and preparing an analysis of executive compensation. We now find ourselves in the middle of what is affectionately called “busy season” for CPA firms, and I can tell you from personal experience, that name is well deserved. Let’s turn our attention to some of the activities that A/E firms should perform in preparation for an overhead audit or submittal of an overhead schedule to a state DOT, and some of the activities a CPA firm performs as part of the audit.