DCAA Compliance Audits
The Defense Contract Audit Agency (DCAA) is an agency of the Department of Defense. Their job is to audit government contracts. The results of the audits are provided to the responsible government procurement agencies. The audits provide advice and opinions on financial and accounting matters to assist the government procurement agency in the negotiation, award, administration, adjustment and settlement of government contracts. DCAA evaluates contractors' policies, processes, procedures, controls, and actual performance. DCAA identifies and evaluates activities which either contribute to, or have an impact on proposed or incurred costs of government contracts.
The following are examples of situations where DCAA may be called upon for their assistance:
- Proposal review
- Accounting system compliance review
- Financial capability review
- Audit of contract costs
- Audit of indirect cost
- Audit of change order/contract modifications cost
- Audit of costs incurred on contracts terminated for convenience
- Audit of cost plus contracts in closeout.
Expereinced contractors as well as contractors that are new or inexperienced with government contracting are often overwhelmed by the accounting requirements, standards and regulations required by the government and DCAA. Even though DCAA cannot dictate how a contractor's accounting system is structured, personnel in DCAA sometimes make strong recommendations to contractors to use accounting practices to suit the government's purposes. These recommendations may have significant financial impacts, cause significant disruptions, and create undue confusion for the contractor.
CCA can assist companies in structuring their contracting infrastructure to survive the impact of a DCAA audit with minimal disruptions. CCA is also experienced in assisting contractors through the audit process.
If you are involved in government contracting, eventually you will experience a DCAA audit. One of CCA's consultants can help you through the process of the audit. If you have been notified that you are being audited by DCAA, contact us immediately so that a knowledgeable CCA representative can expertly guide your company through the DCAA audit process. Click here to have a CCA representative contact you.