As we introduced yesterday, the revised DFARS (DoD FAR Supplement) section 243.803 requires the contract auditor to institute a risk-based approach to reviewing public vouchers (also commonly referred to as "interim vouchers", "requests for reimbursement", "requests for payment", or simply "billings"). That means that the auditor must determine "risk" and then make a selection of vouchers based on that risk assessment.
DCAA (Defense Contract Audit Agency), has made the determination very easy. Contractors with ADV (Annual Dollar Volume) of more than $250 million are high risk. Those with less than $250 million of ADV are low risk unless there were certain threshold questioned costs in prior incurred cost audits. We described those questioned cost thresholds in a previous positing (click here to read it). Those thresholds . ADV represents the total costs incurred on flexibly priced contracts (e.g. CPFF, CPIF, FPI, T&M, etc) during a given year.
We will discuss the sampling plan for high-risk contractors in a later posting. For low-risk contractors, the number of vouchers to be reviewed each year is based on the number of vouchers submitted year according to the following table. For example, a contractor with a single cost-reimbursable contract submitting a monthly voucher can expect to have one voucher pulled for pre-screening.
Click here for Part 3.