1 DCAA 2016 Initiatives A Roadmap for 8(a) firms to Navigate the Minefield PRESENTED BY Patricia J. Mensch, CPA, CGFM, CGMA Partner Government Contract Consulting National 8(a)2016 Winter Conference

DCAA Responsibility What DCAA has been doing What is their plan for 2016 What can you do to prepare Agenda DCAA 2016 Initiatives 2

DCAA Responsibilities Pre-award Contract Services Accounting System Surveys Proposal Audits Forward Pricing Rate Proposals Business System Audits Accounting and Billing Estimating Material Management Post-award Contract Services Incurred Cost Audits CAS (Cost Accounting Standards) Claims and Terminations Voucher audits DCAA 2016 Initiatives 3

Proposal / Demand Work Accounting System Audits Incurred Cost Proposal (ICP) Audits They are Seriously Behind on Other Responsibilities DCAA 2016 Initiatives What has DCAA been doing? 4

New Focus Floor Checks Business Systems - Estimating System and Material Management (MMAS) reviews CAS - Disclosure Statement audits Post award (defective pricing) audits Provisional billing rates Continued Activity Demand work - proposal audits and forward pricing rates Incurred costs audits Billings DCAA 2016 Initiatives What is DCAA’s Plan for 2016? 5

New Audit Focus 6

Floor Checks Be prepared – Select your escort team and train Perform your own floor checks, identify problems Review you written policy, are you actually complying with it Train and Train and Train Escorts should document potential interview problems. Be proactive and resolve miscommunications with the auditor DCAA 2016 Initiatives What can you do? 7

Estimating System Reviews Perform a self assessment Review DFARS and audit guidance Review your estimating manual Compare manual to requirements Test actual proposals for compliance with your written policy Take corrective action Train employees who administer the system Manage the audit, maintain copy of records provided to the auditor DCAA 2016 Initiatives What can you do? 8

Material Management System Reviews (MMAS) Perform a self assessment Is material a significant element of cost Review DFARS and audit guidance Review your written policies for compliance Perform a walk through of your system and test for compliance with your written policy Take corrective action Manage the audit Don’t wait until you are selected for audit, start your review now! DCAA 2016 Initiatives What can you do? 9

CAS (Cost Accounting Standards) Audits Confirm your CAS coverage status Are you a small business Review your contracts – not all contracts have CAS clauses Do you have a requirement for a Disclosure Statement Audit focus – Unaudited contractor submitted Disclosure Statement modifications. Do you have any? Review for adequacy, do they describe your actual practice DCAA 2016 Initiatives What can you do? 10

Post Award (defective pricing) Audits Know what defective pricing is Did you provide current, accurate and complete information Were you required to submit cost or pricing data and certify Carefully analyze the contract selected for audit to insure that it is subject to TINA Do you know what information was provided Locate the records Are the individuals certifying knowledgeable Do you have a sweep process in place If DCAA has findings, do they meet the standard for defective pricing DCAA 2016 Initiatives What can you do? 11

Provisional Billing Rates Submit annual provisional billing rates (PBRs) at the beginning of your FY DCAA is no longer accepting “same as last year” Untimely submission will likely delay payment Ensure indirect rate forecast supports PBRs DCAA 2016 Initiatives What can you do? 12

Continued Audit Activity 13

Proposal Audits Carefully review the solicitation for all proposal requirements Use the Proposal Adequacy Checklist (DFARS ) to test your proposal Have a system to maintain records used to support proposals Assign a point-of-contact for proposal audit DCAA 2016 Initiatives What can you do? 14

Incurred Cost Audits Use the DCAA ICP adequacy checklist to review the ICP before submission Manage the audit Entrance conference to discuss expectations Assign a single point of contact for timely responses Keep a record of all DCAA request and information provided Resolve open items and issues before the audit is finalized DCAA 2016 Initiatives What can you do? 15

Questions? Let’s Talk. Contact: Patricia J. Mensch, CPA, CGFM, CGMA Partner, Government Contract Consulting P: