By: Ben Peterson, CPA
Mauldin & Jenkins, CPAs & Advisors is committed to helping our clients stay informed and compliant with the latest regulations and requirements for their industry and operating locations. In this article, we will cover two important topics for architecture and engineering firms operating in the state of Georgia: overhead audits and Federal Acquisition Regulation (FAR) Part 31 compliance.
What is an Overhead Audit?
An overhead audit is a financial examination of a company’s indirect costs, such as indirect labor, Â indirect materials, and indirect expenses. The purpose of an overhead audit is to assess the efficiency and accuracy of these costs, and to identify any areas for improvement.
Why is FAR Part 31 Compliance Important?
Architecture and engineering firms in Georgia must comply with FAR Part 31 in order to participate in federal and state contracts. The Georgia Department of Transportation continues to require that all Georgia-based consultants with $250,000 or more in contracts with the Department obtain an audited overhead rate by a Certified Public Accountant each year. This regulation outlines guidelines for determining the allowable costs for a contract with the government, including indirect costs.
To comply with FAR Part 31, firms must demonstrate that their indirect costs are reasonable and allocable to the contract, and that they have implemented a system of internal controls to ensure that their indirect costs are properly accounted for. They also must maintain records that support their indirect cost calculations and be prepared to provide these records to the government upon request.
How We Can Help
At Mauldin & Jenkins, we can provide a variety of services to assist architecture and engineering firms with overhead audits and FAR Part 31 compliance. Some of these services include:
- Reviewing cost accounting practices
- Identifying indirect costs
- Verifying indirect cost calculations
- Preparing an indirect cost proposal
- Reviewing internal controls
- Assisting with audits and negotiations
- Providing ongoing compliance support
By working with Mauldin & Jenkins, architecture and engineering firms can ensure that their indirect costs are accurately calculated and in compliance with FAR Part 31. This can help them participate in federal contracts with confidence and minimize the risk of government audits and other compliance issues.
Understanding and complying with FAR Part 31 is essential for architecture and engineering firms operating in Georgia. By working with Mauldin & Jenkins, firms can ensure that their indirect costs are accurately calculated and in compliance with the latest regulations and requirements. If you have any questions or would like to learn more about our services, please do not hesitate to contact our firm to learn more about how we can help.
