DCAA to Establish Milestone Plans for Audit Performance

A few years ago in the wake of the whistle-blower scandal and ensuing Congressional hearings that ultimately toppled its Director, the Defense Contract Audit Agency jettisoned most of the metrics it used to manage audits. The fallout from this was absolutely brutal. The Agency lost most of its credibility and goodwill. The number of audit reports issued dropped precipitously as the Agency no longer seemed to care what the "customer" wanted or needed. In some cases, Judge's orders were required to make DCAA issue audit reports. PCOs and ACOs (Procurement and Administrative Contracting Officers) were not being served and became vocal in their displeasure. As a result, DoD began transferring to other agencies much of DCAA's traditional workload (most pricing audits, financial capability reviews, purchasing system reviews, EVMS reviews, direct billing authorizations, to name a few. Adding additional auditors to chase fewer and fewer audits did not seem to help the Agency to publish audits any quicker.

DCAA management was not oblivious to this demise but its reaction to accusations from oversight agencies like the GAO (General Accountability Office) or the DoD Office of Inspector General) who found that DCAA's audits were "inadequate"caused the Agency it to add appreciably more internal oversight to the audit process (and correspondingly more audit effort and time). The junkyard dog mentality that once characterized Agency personnel has been replaced with John and Jane Milquetoast. Some of us wonder if the bell is about to toll for this once proud fighter for the taxpayer.

To try and put some sanity back into the audit process, DCAA just announced a new policy that will require its auditors to establish milestone plans for various audits. Milestone plans, according to the policy, " ... are intended to be a useful audit management tool that assist the audit team in successfully accomplishing its audit by a realistic due date. Good milestone plans provide a visual document to manage work flow and assist in meeting common objectives. A well-developed milestone plan also will allow the audit team to recognize when established due dates are no longer achievable or increased staffing is required to meet the due date."

There are a number of criteria that need to be considered by the audit staff when developing milestone plans. One of those criterion that should resonate with the contracting community is a requirement to consider the contracting officer's needs when establishing due dates. There's another requirement to explain, justify, and document when milestone dates are missed, not because some individual messed up but so the "process can be improved" - its always the process, never the individual that is to blame.

We do not hold out hope that this policy is going to expedite the issuance of audit reports. The Agency needs more than just a new policy, a flavor of the month, or more faddish fluff. It needs someone or something that will rebuild auditor confidence, courage, and boldness; confidence in knowing they have the knowledge, skills and abilities to conduct professional audits, courage to not care when some picayune oversight agency finds that it forgot to dot an "i" or cross a "t", and boldness in defending sound audit positions.

You can read the new policy here.