Audit

New Audit Policy

• Any firm registered as an NJDOT Emerging Small Business Enterprise (ESBE) (less than $6.5 million in annual gross revenues), or State of New Jersey Small Business Enterprise categories 1 and 2 (less than $5 million in annual gross revenues), will be classified as “Exempt” and will not be required to engage a qualified independent Certified Public Accountant (CPA) firm to conduct the mandatory Overhead and Direct Cost audits.
  
  Firms classified as “Exempt” will be required to prepare and submit annual overhead schedules adjusted in accordance with Generally Accepted Government Auditing Standards, the Code of Federal Regulations, Title 48, Federal Acquisition Regulations (FAR) Part 31.0, 31.1, and 31.2, and the contract payment provisions and applicable State of New Jersey Circular Letters.
  
  
• Consultants not classified as “Exempt” are required to engage a qualified independent CPA firm to perform the Overhead and Direct Cost audits if the firm has $50,000 or more in NJDOT related Direct Labor incurred in any one fiscal year on Cost Plus Fixed Fee contracts.
  
  If there is less than $50,000 in NJDOT related Direct Labor in any one fiscal year on Cost Plus Fixed Fee contracts, then the consultant can opt to submit a firm-prepared Overhead Rate adjusted in accordance with Generally Accepted Government Auditing Standards, the Code of Federal Regulations, Title 48, Federal Acquisition Regulations (FAR) Part 31.0, 31.1, and 31.2, and the contract payment provisions and applicable State of New Jersey Circular Letters.
  
  The Department will accept an independent CPA firm’s combined package of the Overhead, Direct Cost Audit and “Settle-Up Schedule,” subject to a subsequent Quality Assurance Review.
  
  “Exempt” consultants and non-exempt consultants with less than $50,000 of Direct Labor in any one fiscal year, who do not hire an independent CPA firm to prepare their Overhead Rate, must submit their firm-adjusted and firm-prepared Overhead Rate to the NJDOT Bureau of Auditing for review and acceptance. This must be forwarded prior to submission of the Direct Cost audit and “Settle-Up Schedule”. Additionally, a Compliance Certification Form must be submitted with the overhead statement certifying that all required audit criteria were met.
  
  These requirements are applicable to both prime consultants and sub consultants.
  
  The audits must be performed in accordance with Generally Accepted Government Auditing Standards, the Code of Federal Regulations, Title 48, Federal Acquisition Regulations (FAR) Part 31.0, 31.1, and 31.2, the contract payment provisions and applicable State of New Jersey Circular Letters . Current audits must be submitted within nine months of the firm’s completed fiscal year and within the due date schedule for prior periods as follows:
  
  

  Unaudited Costs	Due Date
  1 to 4 years	12 months from effective date (of 06/01/08)
  5 to 8 years	18 months from effective date (of 06/01/08)
  9 years and over	24 months from effective date (of 06/01/08)