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AASHTO ICR Audits (Overhead Rates)

Many states’ Department of Transportation (DOT) agencies are backlogged with requests from architectural and engineering (A&E) firms for approval of their overhead rates. The costs included in the overhead rate must be compliant with the Federal Acquisition Regulation (FAR). In 2010, the federal government issued the 2010 AASHTO Audit Guide (updated in 2012) which provides for auditing procedures that a qualified CPA can perform to issue an audit report on the overhead rate, referred to as a Statement of Indirect Cost Rate. The audit can be provided to the state for approval and can expedite the process for your client. These are Yellow Book audits under Government Auditing Standards, which requires the CPA who is performing the audits to be in compliance with Yellow Book rules. So, if your current CPA is not Yellow Book CPE compliant or your CPA’s independence is impaired under Yellow Book auditing standards, you or your client must rely on the state DOT to audit you or your client's overhead rate and obtain the states’ DOT approval. We are a qualified CPA firm that specializes in overhead audits for A&E firms. We work with clients to help them obtain the correct overhead rate under the FAR.

Upon the issuance of the 2010 AASHTO Audit Guide, states have accepted audit reports from qualified CPA firms. This provides you or your A&E client with more flexibility in obtaining their rate when they need it for bidding on federally funded contracts. You or your client doesn’t have to be dependent on the state DOT’s schedule to review their accounting records and overhead rate, and your firm doesn’t have to become proficient in the FAR and the AASHTO Audit Guide or comply with Yellow Book standards. We also have the experience in auditing A&E firm overhead rates, some of which have been challenged by the state, and we have successfully defended the overhead rate presented.

We are familiar with the issues necessary to make the engagement successful for all parties involved, without jeopardizing your relationship with your client or your current CPA. We have worked with other CPA firms in this capacity and they are comfortable that we will not, and have not, compromised their client relationship. References are available upon request.

Kris Tryon, Director of Attest Services, is an experienced auditor, peer reviewer, and has been performing ICR audits since 2009. She has over 25 years of audit experience. Jeff Mock, Principal, is also an experienced auditor, peer reviewer, and former AICPA Peer Review Board member, with 30 years in auditing and 25 years as a peer reviewer. 

If you would like more information or to set up an appointment to discuss a client or peer review with us, please call us at (425) 401-5061, or email us at