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This report provides the results of the Dept. of Transportation (DoT) Office of Inspector General¿s implementation of Section 307 of the Nat. Highway Systems Designation Act (NHSDA). These provisions are intended, in part, to ensure that design and engineering (D&E) firms¿ indirect cost rates do not contain unallowable costs. The OIG began this audit because of concerns expressed by state transportation officials regarding the allowability of executive compensation and other indirect costs at some D&E firms. Audit objectives were to evaluate the implementation of NHSDA Section 307 audit requirements, and test the allowability of executive compensation and other high risk indirect cost elements billed by D&E firms on state DoT contracts.
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