In honor of today’s date and what it represents, a special blog concerning government actions and reactions.
In a January 9, 2015 DOJ (Department of Justice) press release, it was stated that a former judge plead guilty to accepting a bribe during his election campaign. The article notes that the judge had accepted a political contribution from a source (defendant) which had also been involved in a civil action leading to a $5.2 million dollar jury award to the plaintiff. In something of an unbalanced quid quo pro, the Judge accepted $24,000 in political contributions and in return, reduced the jury award to $1 million (admitting that the $4.2 million settlement reduction was improperly influenced by the $24,000 political contribution). Although the DOJ press release does not give any specific information concerning the defendant, rumor has it that the defendant has been approached by one or more investment firms to lead their strategies on maximizing return on investment (obviously impressed with a $4.2 million return on a $24,000 investment).
Government to Reduce Improper Payments
Not Actually the Payments, but the Estimates
Very recently the Government noted that its estimate of improper payments had increased 19% in 2014 to $124.7 billion (the fact that there is a decimal point is to give superficial accuracy to an otherwise inaccurate estimate….there isn’t any data concerning actual improper payments). In spite of the fact that the Executive Branch encouraged and essentially sponsored legislation in 2010 and in 2012 which required agencies to reduce improper payments, initial reductions have most recently gone the wrong direction. This most recent turn is slightly embarrassing to the Administration which is now rumored to be considering an Executive Order (EO) which would require agencies to change their estimating methods from a point estimate to a range wherein the upper limit would be the previous point estimate and the lower limit would be zero. Although the estimate would have no statistical validity, a government spokesperson was quoted as saying, “Why start now?”
DCAA Announces its New Deputy Director
DCAA just announced its new Deputy Director, an individual with 32 years’ experience with the Government and no practical experience (i.e. no experience outside of the government). Government contractors can expect no changes in DCAA audit strategies including those which freely re-interpret the Federal Acquisition Regulations and assume that DCAA’s interpretations would have been upheld in contract disputes “but for the facts presented by the contractor”. The new Deputy Director is rumored to have established a goal of issuing an “adequacy checklist” for every conceivable contractual requirement, including a super-duper adequacy checklist (certifying that all other adequacy checklists have in fact been adequate as certified by an adequately trained independent CPA audit). In response to contractor complaints that adequacy checklists are “form over substance”, in keeping with the current political agenda, the new Deputy Director displayed his “transparency” by stating: “Of course these adequacy checklists are form over substance to be consistent with DCAA audits”.
Editor’s note: in recognition of today’s date, April 1, the contents of this blog may not in all cases be factually accurate.
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.