Wednesday, January 27, 2016

DCAA Has its Own Office of Inspector General (OIG)

The Defense Contract Audit Agency (DCAA) Office of Inspector General (OIG) was established about a year ago. The DoD OIG began encouraging the establishment of independent OIGs with Defense Agencies and DCAA was one of the first to do so. According to DCAA, the function of the independent OIG is critical because federal employees within the Executive Branch are required to report fraud, waste, abuse and gross mismanagement, which can come in may forms.

Previously, while DCAA has always had an internal review directorate set up to receive similar-type complaints, the process was not governed by statute. Converting the internal review practice to an OIG provides DCAA employees with processes governed by law, as opposed to internal regulatory requirements. DCAA employees can now disclose incidents of fraud, waste, abuse or gross mismanagement without fear of reprisal or retaliation.

Contractors should be aware that the DCAA OIG, besides matter relating to inter-Agency fraud, waste, and abuse, will also investigate contract related fraud, waste, and abuse. These include

  • contract and procurement irregularities
  • cost/labor mischarging
  • defective pricing
  • defective parts
  • bid rigging
  • bribery and acceptance of gratuities

DCAA's new OIG organization is comprised of auditors and investigating officers previously assigned to internal review responsibilities and are located throughout the continental United States. The organization now has its own hotline as well where "private citizens" are encouraged to report incidents of fraud, waste, and abuse.

It seems to us that this new organization is a duplication of the functions already performed by the DoD-IG. It seems like there might be some confusion over which hotline someone should call - the DoD-OIG hotline or the DCAA-OIG hotline. Additionally, it moves DCAA from a purely audit organization to one with investigative responsibilities. Contractors might want to clarify which arm of DCAA they're talking to - maybe legal counsel should be present.

You can read more about the new DCAA-OIG here.

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