The Government is Keeping Track of Billing Rejections

Most Government contractors have had billings rejected by a contract auditor, a contracting officer and/or someone from the paying office. Rejections happen frequently and for many different reasons; an incorrect voucher number, a wrong date, a mathematical error, outdated billing rates, reference to an incorrect contract line item or billing code, Most rejections are administrative in nature, rather mundane and have no impact on the amount claimed and owed the contractor . Sometimes, billings are rejected through no fault of the contractor because someone in the Government's approval chain didn't have the right paperwork. One common example is where contract modifications increasing funding did not get to the person needing that modification so the billing request (e.g. public voucher) is rejected as exceeding contract funding.

Most billing rejections are easy to fix. It might be as easy as changing a voucher number by one number. Perhaps it only requires a file upload to WAWF (Wide Area Work Flow). After fixing whatever it was that needed to be changed, contractors go about their business, ultimately get paid, and put the incident out of their minds.

While contractors might put such events out of their mind however, contract auditors are keeping track of such incidences. In the auditors' view, frequent billing errors may be indicative of systemic billing system deficiencies. It can be somewhat disconcerting for contractors to have three years of billing rejections dropped on them during a billing system audit and prodded for explanations. It may be impossible to explain; contractors do not usually retain and track such information, lack of employee continuity, and the perception that such events are inconsequential.

Sometimes auditors do not believe that anything is inconsequential. The standard audit program for contractor billing system audits contains the following procedure:

Review billings that were rejected by DCAA, other approving officials, and paying offices in order to identify trends and errors which are frequently repeated. Consider the trends and errors when designing the audit procedures to test contractor billings. If there are a significant number of errors (e.g., high percentage of rejected billings) this could be an indication of systemic problems. A deficiency report should be issued when sufficient evidence has been obtained and the auditor can demonstrate compliance with other GAGAS (e.g., adequate planning and supervision).

Whenever a payment request is rejected, contractors should document the situation and preserve it somewhere within the billing system. That way, ready responses are available should anyone inquire.