Most, if not all audit organizations, have permanent files. These are central repositories of information gathered during audits that has continuing value and use to subsequent audits expected to be performed at the same contractor. Permanent files are useful for auditors in assessing risk, preparing audit programs and in determining the appropriate scope of subsequent audits. They also provide ready means for auditors to become familiar with the contractor's operations and any existing audit problems or contractor system weaknesses. While summary information on the contractor's organization, financial structure, and policies and procedures may sometimes be included in permanent files for smaller contractors, such information on large contractors with continuing audit activity is generally maintained in a central reference library. Most likely, permanent files are electronic.
Perm files are maintained to document new or changed contractor
- Internal controls
- Software programs
- Accounting methods that influence the nature, level, and accounting treatment of costs being charged to Government contract.
In the case of DCAA (Defense Contract Audit Agency), the following documents are "logically" included in contractor permanent files:
- Internal control and planning summaries
- Internal control questionnaires (Most contractors have been requested to complete these at one time or another).
- Mandatory Annual Audit Requirement (MAARs) Control Logs.
- CAS Disclosure Statements
- CAS planning and cycling documentation
- CAS complainace and non-compliance tracking
- Audit lead sheets
- Historical pension cost information.
There is nothing mysterious about permanent files. It is simply a term used to describe a collection of information and data that may be useful to some auditor, someday. Audit files (as opposed to permanent files) are eventually archived to Federal Records Centers for a few years, then destroyed according to Government records retention policies. Permanent files are not archived nor do they represent official records. Auditors responsible for maintaining permanent files use their judgment as to what information is added and what can be destroyed.