Introduction

Effective January 1, 2009, local agencies entering into engineering and design related contracts funded in part or in whole with Federal-aid highway funds must ensure the prime consultant indirect cost rate is a cognizant-agency approved rate. 

The following provisions describe the process by which local agencies and their prime consultants may seek cognizant-approval of indirect cost rates and the thresholds for compliance.

Current CAAP Provisions for local agency projects  Revised 09-18-08

Frequently Asked Questions:   http://caltrans-opac.ca.gov/caaufaq.htm

CAAP Announcement Memo   Issued August 7, 2008

Documents of the Cognizant Agency Audit Program for Local Assistance Projects:

Review Request Letter

Certification for Complete Submittal Package

Consultant Questionnaire

Financial Schedules (examples)

Recommended Disclosures and Information (examples)

CPA Questionnaire

CPA Review Letter of Authorization

Indirect Cost Rate (ICR) information for State highway projects is available on the DPAC website at

http://caltrans-opac.ca.gov/aeinfo.htm

For a better understanding of the Cognizant Agency Audit Program please go to the following websites:
23 CFR 172 (the Code of Federal Regulations – Administration of Engineering and Design Related Contracts)
http://www.access.gpo.gov/nara/cfr/waisidx_08/23cfr172_08.html

Federal Highway Administration (FHWA):  Comments/Responses to 23 CFR 172 Exposure Draft
http://www.transportation.org/sites/audit/docs/Uniform%20Audit%20&%20Accounting%20Guide.pdf

FHWA:  Administration of Engineering and Design Related Service Contracts – Questions and Answers
http://www.fhwa.dot.gov/programadmin/172qa.cfm

48 CFR 31 (the Federal Acquisition Regulations – Contract Cost Principles and Procedures)
http://www.access.gpo.gov/nara/cfr/waisidx_07/48cfr31_07.html

For a better understanding of the government (Federal and State) audit standards and guidelines to be used when conducting an audit of an engineering or design-related firm’s indirect cost rate, please go to the following websites:
Government Auditing Standards (GAS)
http://www.gao.gov/govaud/ybk01.htm

American Association of State Highway and Transportation Officials (AASHTO) Audit Guide
http://www.transportation.org/sites/audit/docs/Uniform%20Audit%20&%20Accounting%20Guide.pdf