Wednesday, September 3, 2014

DCAA Passes Peer Review of Quality Control Practices

The other day, we alluded to the recent peer review report issued by the DoD-IG (Inspector General) on the quality, adequacy, and sufficiency of the contract audits performed by DCAA's (Defense Contract Audit Agency). DCAA passed - sort of. The actual rating was "Pass with Deficiency". But, it was a "pass" nevertheless and DCAA, though not entirely pleased, can at least hold out that they have now passed a peer review.

A triennial peer review is required for any Government agency or private firm that conducts audits in accordance with Generally Accepted Government Auditing Standards (GAGAS). Entities are required to develop policies and procedures that will provide it with reasonable assurance of conforming with GAGAS.

Except for a lack of documentation in 11 of 92 audits reviewed, the IG peer review concluded that DCAA's system of quality control has been in compliance and suitably designed to provide the Agency with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects.

What does this mean for the contractor's that DCAA audits? As a practical matter, not much. Their audit reports will no longer contain a qualification that the Agency does not have a current peer review but that fact never seemed to bother the contracting officers to whom reports were addressed nor contractors who were the subject of audit reports.

You can read the entire Peer Review report by clicking here.

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