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.

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Dan Purvine is the President of A/E Clarity Consulting and Training, a firm that specializes in helping A/E firms to navigate the complex rules and regulations applicable to state, federal, and local agency contracts. Dan brings to this role over 14 years of experience in the A/E industry as the Vice President of Finance and Accounting for a large engineering firm. Dan has been providing A/E industry training through A/E Clarity since 2012 and has trained thousands of people in architecture and engineering firms, CPA firms and public agencies. Dan is the former chair of the American Council of Engineering Companies (ACEC) National Audit Subcommittee and continues to work closely with FHWA and AASHTO in his consulting role with ACEC to achieve uniform application of FAR Part 31 and the AASHTO Audit Guide, and to better address the needs of A/E firms nationwide. He has been heavily involved in the development of the AASHTO Audit Guide and the National Compensation Matrix, and works closely with the AASHTO Audit Guide Taskforce to continually improve the Guide as a tool for A/E firms, State DOTs, and CPAs. Dan works closely with state ACEC organizations and many state DOTs on issues related to FAR compliance, audits, and reimbursement of A/E firm costs. A/E Clarity provides training and consulting services and through a related CPA firm, D. L. Purvine, CPA, PLLC, Dan and his team perform overhead audits for clients nationwide. Dan also served as the 2015-16 Chair of the North Carolina Association of CPAs and is a former member of the AICPA Council.