Thursday, April 27, 2017

DCAA's Fiscal Year 2016 Report to Congress

DCAA (Defense Contract Audit Agency) recently made its fiscal year 2016 Report to Congress available on its public website. You can download it here.   This is the sixth annual report published by DCAA which is required by Statute and began during the time that DCAA was under intense scrutiny over the quality of its audits. This report, and all of the reports, highlights DCAA's audit performance, recommendations to improve its audit processes, industry outreach activities, and key accomplishments.

This year's report  offers a glimpse into DCAA's now organizational structure which had basically remained unchanged since the Agency was formed in 1965. There is still a Headquarters. The number of Regional Offices has been reduced from five to four. The most significant change however is the establishment of four Corporate Audit Directorates (CADs). CAD are responsible for overseeing the audits of select major contractors. Formerly, these major contractors were covered by many different branch and sub-offices throughout the country.

The report focuses heavily on DCAA's successes during the year which include reducing the incurred cost audit backlog from 21,000 in 2011 to 4,700 in 2016., achieving net savings of $3.6 billion and returning $5.70 to the Government for every dollar it spends.

The section of the report that we and most contractors are interested is recommendations to improve the audit process. This year, the Agency expressed a desire to become more involved in the legislative processes impacting the Agency. Also, they Agency yearned for assistance in maintaining a steady level of staffing. It takes a long time to recruit, train, and develop audit staff but the on-again off-again nature of hiring freezes presented a major barrier and hindered its ability to accomplish its mission. There is no sense of self-reflection in DCAA "recommendations". Apart from Congress's muddling, everything is fine.

DCAA's conclusion is this:
DCAA is an important member of the acquisition community with a unique and valuable mission. Our new organization structure will increase communication and coordination with major defense contractors while allowing our regional directors to focus on small and mid-sized contractors. We will continue to develop innovative ways to improve the audit process and make our services more responsive to the needs of acquisition community. We are ready for the challenges of the future and look forward to continuing to serve the warfighter and taxpayer.


  1. Yes it is just another wonderful day at DCAA. As a contractor's rep once told me, you have to ask the right questions to obtain the information you need to support your audit. What DCAA needs to answer is how many Incurred Audits are being magically low risked away? The answer ranges is in the 75% range. 75% of contractor incurred submissions are not reviewed and given a pass and this is the only way DCAA inept, myopic and self serving management can say the agency is getting anything done. Also one thing DCAA does do will the incurred submissions they do not review and low risk away, the agency claims the contractors voluntary deletions usually FAR Cost Principles unallowable costs and DCAA findings as questioned cost. DCAA unethically and with lack of candor claimes those voluntary deletions as DCAA findings and reports that to Congress. Again, the question should be what is the true dollar amount of actaul audit findings and DCAA would have virtually nothing to show for all the taxpayers money they use. As those of you who follow DCAA they have lsot muliple ABACA cases and if the public would the the tens of thousands of hours and the awards given to upper management spent on DCAA audits in these lost cases, there would be outrage. Ask the right quetions and DCAA will not answer, except to say we need more auditors to take more sick leave and take DCAA's abysmal traing at DCAI Atlanta GA, with Billy.

    1. Does DCAA really claim contractor voluntary deletions as their own savings? Can anyone confirm?