NASA Calls Foul on DCAA Low-Risk Determinations

Yesterday, NASA announced that it would no longer accept low-risk determinations issued by DCAA (Defense Contract Audit Agency) on its contractors where the preponderance of the work relates to NASA contracts. Although unstated, NASA's rationale is apparent - not every agency is enamored with DCAA's low-risk determination procedures and the resultant mass write-off of incurred cost dollars without any audit or oversight.

DCAA has informed its auditors to cease issuing low-risk determinations on behalf of NASA. Additionally, DCAA advised its staff, for contractors where NASA doe not represent the preponderance of dollars, to coordinate with NASA to determine whether any issues or concerns exist on NASA contracts before issuing low risk determinations.

Contractors may not like the new policy because it now increases their chances of coming under audit. Its not clear whether the audits will be performed by DCAA or whether NASA, as many other Agencies do already, will go out and hire non-Governmental CPA firms to perform the work.