The Federal Highway Administration (FHWA) is pushing for quicker project closeout timeframes. In 2012, the USDOT received a material weakness for lack of attention to project closeouts and for lack of attention to project agreements close out procedures.
The average time for a project with Federal Aid money to be closed out is 1.8 years. As we are all aware, there are some projects that have not been closed out in five years or longer. Currently, for the Federal Highway Aid program there is no national standard for closeout timeframes. It is now a goal to speed up the close out process which will benefit all parties including the contractors, A/E, firms, and state/federal agencies. The close out process will be evolving but will likely be based on risk assessments and thresholds based on dollars involved and other relevant factors.
To learn more about potential changes to the project closeout process and other related topics that are top of mind for A/E firms, visit our Architectural/Engineering Firms page or contact Keith Eldredge, CPA, Partner, at 717.843.3804 or email@example.com.
Contributed by Hunter Mink, CPA, (firstname.lastname@example.org) a manager in RKL’s Auditing and Accounting Services Group. Hunter has extensive experience working with A/E firms and a comprehensive understanding of Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS).