Government Audit Exposure: Managing Risks in the Environment
Government Contractors Alert
The current administration and Congress face many sizable challenges, none the least of which are addressing an economy in turmoil, an overseas contingency operation, and implementing an enormous stimulus package. Under these circumstances, the President, Congress, and federal agencies have focused on elimination of fraud, waste, and abuse in government contracting. As a result, Government oversight of organizations receiving federal money is intense and escalating. In the midst of these events, the Defense Contract Audit Agency (“DCAA”) has taken on a whole new world approach to auditing which is being felt throughout the government contracting industry and, in some cases, is resulting in disapproval of major cost systems and suspension and disallowance of costs. These risks are commanding the attention of the corporate executives, boards, and audit committees. This article addresses a number of new audit directives issued by DCAA, and in particular, those that relate to a contractor’s internal control system used for contract compliance. In addition, we identify recent proposed changes to the Defense Federal Acquisition Regulation Supplement (“DFARS”) impacting contractor business systems and cash flow.
About Government Contractors Alert
Government Contractors Alert is a periodic e-mail subscription that will feature topics such as new Cost Accounting Standards, Federal Acquisition Regulations, new generally accepted accounting principles and other matters related to federal government contracting.