Tuesday, October 11, 2011

DCAA Discontinues Audits of Contractor Purchasing Systems

On September 30, 2011, DCAA (Defense Contract Audit Agency) instructed its audit staff to no longer initiate audits on contractors' internal controls over purchasing systems. DCAA will continue to audit the costs as part of proposal evaluations and incurred cost audits but will no longer be concerned with "purchasing systems" per se. That responsibility will be turned over to DCMA (Defense Contract Management Agency)

DCAA stated that the switch in policy it part of its "continued effort to identify and eliminate areas of potential overlapping responsibilities, while looking for opportunities to improve efficiencies within DCMA and DCAA to ensure the appropriate use of resources while protecting the taxpayers' interest." DCMA meanwhile, has established a Purchasing System Review Center and will increase both the number of analysts and the number of reviews to be performed.

This is another in a string of audit area that DCAA is abandoning following the appointment of its new Director. Other areas the Agency has abandoned recently include EVMS (Earned Value Management Systems), Financial Capability Reviews, Forward Pricing Indirect Rates, Cost-reimbursable proposals under $100 million, and Fixed-price proposals under $10 million.

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