DCAA recently published its 2012 Year in Review which highlighted the fact that DCAA’s net savings was $4.2 billion (the highest in Agency history) and representing a ROI of $6.70 for every dollar “invested”. The terminology and the 30 page report are written as if taxpayers are stockholders and DCAA is reporting to those stockholders. For the record, DCAA’s net savings are unaudited as are every other statistic included in the report.
The 30 page report is clearly not a report to stockholders because DCAA’s report is full of self-aggrandizing hyperboles which appear to be fictional work as opposed to anything representing a factual, balanced report on DCAA. For example, DCAA highlights and takes credit for increasing its incurred cost audits issued by “six-fold” over 2011; however, 2011 was a totally embarrassing year wherein DCAA could only complete a miserably low 349 incurred cost audits. No one should declare success when that success is merely a comparison to the worst year ever.
In self-serving fashion, DCAA only reports its 2012 equitable adjustments/terminations where it examined $6.4 billion and questioned $.405 billion. In contrast, in 2011, DCAA examined $2.5 billion and questioned $1.0 billion (exceptions in 2011 which were 2.5 times higher than 2012). Similarly, DCAA makes note of the fact that in 2012 its 4,492 auditors issued 6,700 audit reports, but fails to report any comparison to 2011 when 4,225 auditors issued 7,000 audit reports. Unlike “real financial statement reports” DCAA chose to “overlook” reporting comparative data if the trend was unfavorable; Oops!
And finally, one of many DCAA statements which simply defy logic and can’t pass the “sniff test” in terms of having any basis in fact: “Importantly the contractor agreed with the majority of DCAA’s findings because they understood and trusted DCAA’s process for identifying the exceptions”…..Seriously?
Mike Steen is a Emeritus Advisor with Redstone Government Consulting, Inc. and a specialist in complex compliance issues to include major contractor cost accounting & business system regulations, financial compliance, resolution of DCAA audit issues, Cost Accounting Standards application, litigation support, and claims preparation. Prior to joining Redstone Government Consulting, Mike served in a number of capacities with DCAA for over thirty years, and upon his retirement, he was one of the top seven senior executives with DCAA. Mike Served as a Regional Director for two DCAA regions, and during that time was responsible for audits of approximately $25B and 800 employees. In October 2001, he was selected for the Senior Executive Service and in 2006 he received the Presidential Rank Award. During Mike’s tenure with DCAA, he was involved in conducting or managing a variety of compliance audits, to include cost proposals, billing systems, Cost Accounting Standards, claims, defective pricing, and then-evolving programs such as restructuring, financial capability and agreed-upon procedures. He directly supported the government litigation team on significant contract disputes and has prepared and presented various lectures and seminars to DCAA staff and business community leaders. Since joining Redstone Government Consulting in June 2007, Mike has developed and presented training and seminars on Government Contracts Compliance to NCMA, Federal Publications Seminars and various clients. Mike also is a prolific contributor of written articles to government contracting publications, as well as to our own Government Insights Newsletter. Mike also serves as the director of our training service offerings, with responsibilities for preparing and developing course content as well as instructing our seminars to clients and general audiences throughout the U.S. Mike also serves as a faculty instructor for the Federal Publications Seminars organization. Education Mike has a BS Degree in Business Administration from Wichita State University. He is also a graduate of the DCAA Director’s Fellowship Program in Management, and has a Masters Degree in Administration from Central Michigan University. Mr. Steen also completed a number of OPM’s management and executive development courses.