Friday, October 19, 2018

DCAA's Annual Report to Congress - Part IV

Today is the final post in our series on DCAA’s latest performance report. If you missed any of the earlier installments, you can find them here: Part I, Part II, and Part III. Part I discussed DCAA return on investment. Part II discussed DCAA’s professional staffing, the cost of performing audits and some insight on sustention rates. Part III dealt primarily with DCAA’s progress in reducing its incurred cost backlog. In this final installment, we will cover the average length of time required to complete audit, a couple of recommendations to Congress on how the audit process can be improved, and DCAA efforts to assist small businesses in various aspects of Government contracting.

No matter how you look at it, the time it takes for DCAA to complete and audit and issue a report is long. When evaluating forward pricing proposals, it takes DCAA an average of 83 days. That’s a far cry from 30 days just a few years ago. For incurred cost, the length of time, measured from the date that an adequate proposal is received until an audit report is issued or it is administratively closed out because it is low-risk is 143 days. Remember, we’re dealing with averages. DCAA did not specifically report the number of days to close out an incurred cost year when an audit is required. If they did, the elapsed days would be significantly higher than 143 days.

DCAA made two recommendations to improve the audit process. One is not so much of a recommendation as it is a plea to a better working relationship with Congress. The other deals with a need to facilitate or expedite hiring authority for new auditors. Neither one of these would seem to have a direct impact on improving the audit process.

DCAA is one of several agencies required to proactively engage with industry to improve the acquisition process. Specifically, DCAA was tasked with the requirement to clarify audit requirements, understand and address contractor concerns and improve the audit process. DCAA reported a number of meetings with industry leaders and reports that it is encouraging auditors to “be more flexible, responsive, and proactive in addressing industry concerns”. We’re not sure that such “flexibility” has worked its way down to the audit staff yet. One thing we have noticed is that DCAA seems to be taking a more active role in small business outreach such as participating in PTAC (Procurement Technical Assessment Center) seminars.

If you wish to read the full DCAA performance report yourself, it can be accessed here from DCAA’s public website.

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