Contractors should be aware however that information provided to auditors could get circulated to and among other Government agencies. A lot of proprietary information provided to the auditor is routinely provided to the contracting officer to negotiate and administer contracts. This is a proper use of such information as the contract auditor is a representative of the contracting officer and acts under the contracting officer's authority.
Many contractors however are not aware of the relationship between the auditor and investigative agencies. Audit files and contractor proprietary data is routinely provided to investigative agencies. According to the DCAA Contract Audit Manual,
Auditors will cooperate with representatives of the FBI (Federal Bureau of Investigation), DoD criminal investigators, and criminal investigators from other agencies (presumably that would include the IRS investigators). Written material and access to files or working papers already in the possession of the auditor will be made readily available to such investigators. It is not necessary to inform the contractor when information is provided to investigators (see DCAAM 1-405).Contractors should understand that data and information collected by the contract auditors could wind up in investigative files.
With that bit of cheery news, we at Pacific Northwest Consultants wish everyone a happy and prosperous new year.