Compensation/Bonus Guidelines for the ASSHTO

AASHTO (American Association of State Highway and Transportation Officials)


Do you have any sample bonus plan language or can you tell me where to find some that will stand up to the new ASSHTO Audit Guide requirements?  AASHTO (American Association of State Highway and Transportation Officials)



No I do not.  However………….Let me first say that one option, which you may already have considered, is for you to check with some of your colleagues that have or are doing business with the federal government, their compensation plans should be a good boilerplate for addressing your inquiry, IF their plan is in accordance with GAAP (Generally Accepted Accounting Principles) under normal operations.

That being said, after I refreshed and reviewed my knowledge base on the ASSHTO Audit Guide, I would like to point out that the key changes to the new requirements pertaining to compensation, and by the way most of the other changes, is that they are now in accordance with FAR principles.  More specifically, 31.205-6.  

How interesting.  Other agencies and audit organizations continue the move to come in line with FAR PART 31 cost principles.  Why? They offer broad standard guidelines that can be consistently applied, most of the times. 

So, if you take a firms existing compensation policies and revise them to include the FAR Part 31.205-6 guidelines on what is considered FAIR & REASONABLE, then you should generally be in compliance, “To The Best of Your Knowledge and Ability”. 

Again, I have not developed a specific and detailed COMPENSATION/BONUS PLAN Template.  However, in my experience, many government firms with active contracts, may come across a review of their compensation plan.  Depending on their size in employees or revenue, a review may include a simple understanding of what makes up the components of compensation and a check to see that wages and benefits are reasonable.  This is why I have worked hard over the years to let our workshop attendees, clients, and our online members understand the importance of obtaining a general basic understanding of FAR Part 31.205 cost principles.   

The level the ASSHTO is moving seems to be in looking much more closely at 31.205-6 as it pertains to reasonableness for A&E and related audit/consulting concerns.  More specifically, for Bonuses, see 31.205-6 (f)(1).

I hope this helps but if you have an even more specific question that goes deeper into a specific compensation item, please let me know.  If you do come across something more specific as it pertains and/or addresses the ASSHTO audit guide requirements, please share it with me also!