DCAA Auditing Changes RedstoneMany of us who have retired from DCAA as well as contractors like to discuss the “good old days” before DCAA audits became marathons and helping contractors was not forbidden.  As DCAA became more demanding and intrusive, the preferred alternative for a contractor was to be subjected to the less-intrusive review by DCMA.  Now it appears that contractors may soon be longing for the “good old days” of DCMA as well.

A few recent DCMA actions brought up memories of the new DCAA.  First, was the receipt by a client of a 3 page, 22 item letter requesting information for a financial capability evaluation – due in 15 days.  Second was a report issued by the Contractor Purchasing System Review (CPSR) Team which cited as a “significant deficiency” the lack of a policy related to requirements that were not applicable to the company.  Third, a contractor’s forward pricing (bid) rates were going to be reviewed by DCMA, but first the contractor had to complete an adequacy checklist (not required by any regulation, but borrowed from DCAA).

For at least the last 35 years, there have been rumors that DCAA would be merged into DCMA.  Now it seems that that DCAA and DCMA are blending together, unofficially.  DCMA, in some cases staffed by former DCAA auditors, now performs reviews of purchasing systems, earned value management system reviews, forward pricing proposals, disclosure statements, financial capability, and forward pricing rate proposals, all of which used to be performed by DCAA.  The biggest difference in what DCAA used to do and what DCMA now does, is that DCMA does not call them audits and does not perform them in accordance with Generally Accepted Auditing Standards (GAGAS).

As DCMA takes over more and more of the work that DCAA used to perform, the similarities between the Agencies seem to increase.  It now appears that DCMA is following DCAA’s lead in performing system reviews by following a checklist.  If anything on the checklist is missing, there is a significant deficiency, which makes the system inadequate.  This has been a problem for as long as there have been system reviews – but typically limited to reports coming from DCAA.

Bottom line – anyone longing for the “good old days” in terms of the experience of dealing with the new DCAA, just needs to go through the experience of dealing with the new DCMA.  They will feel right at home.

Learn More About our DCAA  Audit Support Services

Written by Cheryl Anderson

Cheryl Anderson Cheryl Anderson is a Director with Redstone Government Consulting, Inc. She provides Government Contract Consulting services to our government contractors primarily related to equitable adjustment claims, terminations, and DCAA audit expectations. Prior to joining Redstone Government Consulting, Cheryl served in a number of capacities with DCAA for over thirty-five years. Upon her retirement, Cheryl was a regional audit manager with DCAA. Cheryl began her DCAA career in 1977 as an auditor-trainee with the Ingalls Resident Office in Pascagoula, Mississippi. After instructing at the Defense Contract Audit Institute for four years, she returned to the Eastern Region in 1990, holding various audit positions before ultimately becoming a Regional Audit Manager in August 2005. She had overall management responsibility for audits performed by approximately 200 employees. During Cheryl’s tenure with DCAA, she was involved in conducting or managing a variety of compliance audits, to include cost proposals incurred cost submissions, systems, Cost Accounting Standards, claims, defective pricing, financial capability and agreed-upon procedures. She directly supported the government litigation team on a contract dispute and has prepared and presented various lectures and seminars to DCAA staff. In addition, she has served as an instructor for the Government Audit Training Institute for over 20 years. She currently specializes in preparing clients for more complex DCAA audits, providing advice on FAR cost principles and contracts regulatory provisions, and assisting clients in anticipating and addressing audit. Education Cheryl has a BS Degree in Accounting from Auburn University at Montgomery and a Masters of Business Administration from Wichita State University. Cheryl also completed courses at OPM’s management and executive development centers and at the Federal Executive Institute and is a Georgia Certified Public Accountant.

About Redstone GCI

Redstone Government Consultants are a team of the most senior industry veterans and the brightest new talent in the industry. Many have held senior government positions including leadership roles in the DCAA. Our new talents bring significant accounting and software experience along with fresh perspectives, inspiration and energy to our team. Through our leadership and combined experience, we provide a unique perspective, bringing both government and contractor proficiencies to bear and ensuring rock-solid government compliance for our clients.

Topics: Business Systems Review, DFARS Business Systems, DCAA Audit Support