Monday, May 3, 2010


The feature article in the March 2010 issue of Government Contract Costs, Pricing & Accounting Report is entitled "GAO vs DCAA - And the Winner is?....Contractors!". It was written by Richard Loeb, a long-time employee of the CAS Board (Cost Accounting Standards Board). As Loeb describes the on-going internecine feud between DCAA and GAO (and Congress), its apparent that his sympathies lie with DCAA. The problem, as Loeb see it, is that the winner from this great slaughter are not the taxpayers but those Government contractors who will monitarily benefit from less audit oversight.

We have provided a link to a copy of this article and we encourage you to read it. Please note, it is used with permission of Thomson Reuters and further use without the permission of West is prohibited.

The results of the GAO reports and subsequent Senate hearings on DCAA, Loeb writes, is that DCAA spends more time on low-risk audits and spends more time on documenting auditor work and management review. We see the manifestations of this increased effort all the time. It takes significantly longer now for DCAA to issue an audit report. Reports that were routinely issued in 30 days, are now taking much longer. But, as Loeb writes, the increased effort doesn't necessarily mean that the audits are better, that risks are more thoughtfully considered, or even that the Government will achieve lower prices or cost savings. One thing for certain though, the procurement activities that rely on those audit reports to award and administer contracts are becoming increasingly frustrated.

The question that everyone shoud be asking is which audits are not getting done? If DCAA has limited resources but the same level of audit responsibilities, something is not getting done. If the Agency is taking longer to perform its audits, other audits are not being performed. Is no one concerned about what is not being performed?

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