Directive 2 PROCEDURES FOR THE AUDIT OF VOUCHERS SUBMITTED

THE CITY OF NEW YORKOFFICE OF THE COMPTROLLERINTERNAL CONTROL AND ACCOUNTABILITY DIRECTIVESDIRECTIVE 2 - PROCEDURES FOR THE AUDIT OF VOUCHERS SUBMITTEDUNDER COST REIMBURSABLE CONTRACTUAL AGREEMENTSINTRODUCTIONThis Directive provides procedures agency audit staffs must use for auditing paymentvouchers issued against cost reimbursable contracts. Agencies must insure that voucher audits areconducted in accordance with the Directive's requirements prior to approving requests for paymentunder such contracts. The Directive summarizes the cost accounting principles applicable to cost reimbursablecontracts, provides techniques for assessing the allowability of direct and indirect costs presentedfor payment, and offers specific audit steps and procedures for conducting voucher audits. Cost reimbursable contracts generally provide for the recovery of indirect costs and profitby applying either an overhead multiplier or a fixed fee markup to direct costs. The audit ofindirect costs, particularly when an interim multiplier is used, is an area that requires particularattention. Consequently, the Directive places significant emphasis on this subject. This Directive is issued pursuant to Section 93(h) of the New York City Charter, whichempowers the Office of the Comptroller to prescribe methods for preparing and auditing vouchersbefore payment and to conduct reviews to ensure compliance. The Directive's provisions must bereflected in requests for ...