Tuesday, May 29, 2012

Investigative Support

From time to time during the normal course of their audits, contract auditors turn up information (or indicators) of potential fraud, waste, or abuse. Since contract auditors are not "investigators", this information is turned over to one of the Government's investigative services such as the investigative arms of the various Inspector Generals, or the Army Criminal Investigative Command (CID), the Air Force Office of Special Investigations (AFOSI), or the Naval Investigative Service (NIS).

Although contract auditors are not investigators, they do offer investigative support services. Often times, indicators of fraud, waste, and abuse are based on intricate accounting or internal control irregularities where the assistance of an accounting expert is essential to understanding and successfully prosecuting contract irregularities.

In fiscal year 2011, the Defense Contract Audit Agency (DCAA) supported more than 160 investigations. These investigations resulted in more than $350 million cost recoveries for the Government. Of course that amount was not solely a result of DCAA effort. DCAA was but one of the "team" that secured these monies.

Most Government contractors are unaware of this cadre of investigative support auditors. That's a good thing. However, even if a contractor is under investigation, it might not ever encounter these auditors. That's because their work is usually conducted at the investigator's offices or the U.S. Attorney's office using data and records that have been subpoenaed.

There is supposed to be a firewall between the investigative support auditors and the regular auditors. Information acquired during an investigation (especially coming from a Grand Jury) cannot be used for any other purpose including contract audits. For this reason, agency's sequester their investigative support auditors to avoid any possibilities that investigative information might somehow flow back to the contract audit side of the organizations.

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