Defense Auditors’ Focus on Riskiest Contracts Lacks Plan, GAO Finds

December 20, 2012

The controversial move by the Defense Contract Audit Agency to more selectively perform incurred costs audits lacks an implementation plan, a time frame and performance metrics, according to a Government Accountability Office report.

Three years ago, DCAA’s newly installed Patrick Fitzgerald began refocusing resources and revamping audit procedures and training to stress quality over quantity. This type of triage meant raising by tenfold the threshold dollar amounts that trigger incurred cost audits of fixed-priced and cost-type contracts.

Though “this initiative appears promising,” GAO found, DCAA “has not fully developed the measures by which it will assess whether the initiative reduces the backlog in a manner that protects the taxpayers' interests. Specifically, DCAA does not have a plan for how it will determine whether key features of the initiative, such as the revised risk criteria and the revised sampling percentages, should be adjusted in the future.”

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