Is DCAA's New Audit Report Format More Professional?

In 2014 DCAA quietly rolled out its new audit report format which generated some obvious questions:

1. Why would DCAA focus any resources on its audit report format at a time when DCAA needs to focus its resources on its huge incurred cost backlog?
2. Why focus on audit report format when DCAA issues fewer and fewer audit reports with each passing each year?
3. Is DCAA’s new audit report format more professional? (one of the primary reasons why DCAA made the change)

Although we may never know the answers to the first two questions, the third question is presumably more important although we need to clarify that per DCAA, the 2014 changes were designed to enhance the professional appearance of their audit reports (perhaps we are splitting hairs, but professional appearance isn’t exactly the same as enhancing the professional content of the audit reports).   Regarding the professional appearance, one can’t help but notice that DCAA now has color graphics within the DCAA letterhead as well as in the header and footer. We are absolutely certain that everyone would agree that having the footer, “For Official Use Only” in white with a blue banner is far more professional than black text on a white background. In fact, we suspect that DCAA could consider further enhancements which could include subtle watermarks such as Mt. Rushmore or perhaps Mt. Denali (the mountain formerly known as Mt. Denali, then Mt. McKinley and now back to Mt. Denali).

Beyond the all-important insertion of color graphics, we made note of the fact that DCAA’s EXECUTIVE SUMMARY is all in “caps”, another spectacular move toward a more professional appearing audit report.   On that same page, DCAA’s report now has a paragraph “ABOUT THIS AUDIT”, which is unbelievably more professional than the old terminology, “Subject of Audit”. One can study the two different phrases and the newly enhanced professional appearance simply leaps off the page leaving one spellbound. In one recent case, “ABOUT THIS AUDIT” had an initial sentence “As you requested”; unfortunately “you” were not identified before or after this sentence. We now realize that DCAA has shown exceptional creativity and dexterity by allowing any reader to assume the role of “you”).   DCAA follows this paragraph with “WHAT WE FOUND”, a very noticeable change from the previous “Results of Audit”.   We aren’t sure that it is more professional but it is undeniably more accurate to refer to “WHAT WE FOUND” as if DCAA is engaged in a treasure hunt rather than an audit. After all DCAA’s new mantra is to protect the taxpayer and how better than to find and report hidden treasures (cost exceptions which are so hidden as to not exist as evidenced by DCAA’s dismal cost questioned sustention rate).

Of passing interest, DCAA did not invent the use of “WHAT WE FOUND” (as the result of an audit), the GAO (Government Accountability Office) uses the same terminology (which is why DCAA uses it). Fortunately, DCAA has not embraced every GAO reporting nuance, including GAO’s reference to “why we did this study” in reference to audits. We’ve also noted DCAA “audit” reports with less than precise terminology such as “our review disclosed”. For those who are actually in the audit profession, a study has never been synonymous with and audit, nor is a review the same as an audit. However, we’ve apparently missed the obvious, that imprecisely mixing terminology (study = audit = review) is enhancing the professional appearance of audit reports (or studies or reviews).   A professional audit report would not mix and match terminology, but there’s nothing unique about that phenomena given that DCAA audit reports embellish their regulatory references (insert a word here or there).

One other peculiar notion within DCAA’s roll-out of the new report, it kept a statement within the audit report that DCAA auditors are available to discuss the audit report before and after the report is issued. Although it would seem to be impossible to issue a report while offering to discuss it before it was issued, we suspect that DCAA simply embraced the concept of time travel and/or was highly impressed with the movie “Back-to-the Future”.

We can hardly wait for future actions (GAO, then DCAA) to enhance the professional appearance of audit reports. Perhaps hyperlinks to popular gaming software embedded in the audit report or inserting photos of the auditor’s family and pets. Of course, DCAA could not possibly include photos of all auditors involved in any given audit because DCAA uses extended teams on the risk assessment and each of the failed attempts to actually complete an audit.

As noted earlier in this blog, enhancing the professional appearance isn’t the same as enhancing the professional quality of an audit report unless one believes that color graphics will overcome unsustainable audit results/exceptions. Oops, I meant to say “WHAT WE FOUND”, not audit results.