1. DCAA – WHO WE ARE and WHAT TO EXPECT
Laura Cloyd-Hall, Branch Manager
Trista Franklin, Supervisory Auditor
August 21, 2013
The views expressed in this presentation are DCAA's views and not necessarily the views of other DoD organizations

2. Agenda DCAA MISSION DCAA Pre-Award Audits and Non-Audit Services
DCAA Post-Award Audits and Non-Audit Services
DCAA Public Website

3. DCAA MISSION
The Defense Contract Audit Agency (DCAA), while serving the public interest as its primary customer, shall perform all necessary contract audits for the Department of Defense (DoD) and provide accounting and financial advisory services regarding contracts and subcontracts to all DoD Components responsible for procurement and contract administration. These services shall be provided in connection with negotiation, administration, and settlement of contracts and subcontracts to ensure taxpayer dollars are spent on fair and reasonable contract prices. DCAA shall provide contract audit services to other Federal agencies, as appropriate.

4. Defense Contract Audit Agency
Approximately 5,000 employees located at over 300 offices throughout the United States and overseas
Responsibilities and Duties:
Perform all needed contract audits for DoD
Provide accounting and financial advisory services to DoD (and civilian when requested) acquisition and contract administration components during all contract phases:
Pre-award
Post-Award (Contract Execution)
Settlement (Contract Closing)

5. DCAA Pre-Award Audits and Non-Audit Services
Audit Services Before Contract Award
Pre-Award Accounting System Survey
Complete Proposal Audit
Cost Realism Analysis
Forward Pricing Rate Audit
Non-Audit Services Before Contract Award
Specific Cost Information Readily Available / On File

6. Audit Services Before Contract Award
Pre-Award Accounting System
Purpose: To determine if the design of the accounting system is considered acceptable for award of a prospective contract in accordance with the criteria contained in FAR (f)
References:
SF (FAR )
Audit Program 17740
Contract Audit Manual (CAM) “Pre-Award Surveys and Adequacy of Accounting System for Contractual Requirements”
Preaward Accounting System Adequacy Checklist

7. Audit Services Before Contract Award
Complete Proposal Audit
Purpose: To determine if the proposal represents a fair and reasonable price
References:
Adequacy FAR , Table 15-2, Walk Through
Information for Contractors, Enclosure 3
Audit Program 21000
Contract Pricing Proposal Adequacy Checklist
FAR General
FAR Selected Costs
CAM, Chapter 9, Audit of Cost Estimates and Price Proposals

8. Audit Services Before Contract Award
Cost Realism
Purpose: To determine if the proposal represents a fair and reasonable price
References:
Audit Program 27010
CAM, Chapter 9, Audit of Cost Estimates and Price Proposals
Forward Pricing Rate Audit
Purpose: To determine if the proposed rates are fair and reasonable
Audit Program 23000
Forward Pricing Rate Proposal Adequacy Checklist
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9. Non-Audit Services Before Contract Award
Specific Cost Information
Purpose: To provide readily available rate information for potential contract awards falling under the DFARS, PGI (c) threshold
References:
DFARS, PGI (c): fixed-price proposals exceeding $10 million; cost type proposals exceeding $100 million
“Readily Available” rate information is not meant as a recommendation or approval of the rates proposed, but consists solely of rate information that we have on file, whether audited or not
No audit opinion – disclaimer of opinion included on confirming memorandum
CAM, Chapter 9, Audit of Cost Estimates and Price Proposals

10. DCAA Post-Award Audits and Non-Audit Services
Audit Services After Contract Award
Incurred Costs / Final Annual Indirect Rates
Post-Award Accounting System
Contract Closings
Claims/Terminations
Floor Checks
Labor and Timekeeping
Material Purchase Consumption/Existence
Truth in Negotiations Act Compliance
Business System Audits
Non-Audit Services After Contract Award
Interim Voucher/Progress Payment Reviews

11. Audit Services After Contract Award
Incurred Cost/Annual Indirect Rates
Purpose: To determine whether costs charged to auditable Government contracts are allowable, allocable, and reasonable in accordance with the contract and applicable Government acquisition regulations
Reference:
FAR (d)
Incurred Cost Electronically (ICE) Model
Information for Contractors, Enclosure 6
Incurred Cost Submission Adequacy Checklist
Audit Program 10100
CAM Chapter 6, Incurred Cost Audit Procedures
CAM Chapter 7, Selected Areas of Cost

12. Audit Services After Contract Award
Post-Award Accounting System
Purpose: To determine if the accounting system is adequate for accumulating and billing costs on Government contracts
References:
Audit Program 17741
CAM “Criteria for Adequate Billing Systems”
CAM “Post Award Accounting System Audits”

13. Audit Services After Contract Award
Contract Closings
Purpose: To determine the cost and fee (or profit) payable for closing of cost reimbursement, labor hour, T&M and FPI contracts/subcontracts
References:
FAR – Quick-Closeout Procedures
FAR – Allowable Cost and Payment
Audit Program 15400
CAM – Processing of Completion voucher
CAM Quick Closeout Procedures

14. Audit Services After Contract Award
Terminations/Claims
Purpose: To determine if the proposed or claimed costs are acceptable as a basis for negotiation or settlement
References:
Audit Programs – 17100, 17200
CAM Chapter 12

15. Audit Services After Contract Award
Floor Checks
Purpose: To verify employees are actually at work, performing in assigned job classifications, and charging time to proper cost objectives
Reference:
Contractor’s own timekeeping internal controls and procedures
Audit Program 10310
CAM – Audit of Incurred Labor Costs
Material Existence
Purpose: To verify that purchased direct materials/services were received, needed for the contract, purchased in reasonable quantities, at a prudent price, used on the contract, and properly accorded for as to initial charge, transfer in or out, and residual value
Audit Program 10320
CAM Audit of Incurred Material Costs and Purchasing Services

16. Audit Services After Contract Award
Truth In Negotiation Act Compliance
Purpose: To determine if a negotiated contract price was increased by a significant amount because the contractor did not submit or disclose accurate, complete and current cost or pricing data
Reference:
Audit Program 42000
CAM Postaward Audits of Contractor Cost or Pricing Data

17. Audit Services After Contract Award
Business System Audits
Purpose: To evaluate compliance with internal controls
References: DFARS Contractor Business Systems (February 2012)
Accounting
Estimating
DCMA reviews Purchasing, Gov’t Property, MMAS

18. Non-Audit Services After Contract Award
Voucher/Progress Payment Review
Purpose: To determine if interim vouchers are based on accounting records and met the terms of the contract
References:
CAM , Responsibility for Processing and Approval of Interim and Completion Cost-Reimbursement Vouchers
FAR , Billing Rates

19. DCAA Public Website www.dcaa.mil Information for Contractors ICE Model
Audit Programs
Contract Audit Manual
Checklists
MRDs – Audit Guidance
Field Audit Office Locator

20. Questions
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