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Whitepaper: The Audit World's Biggest Myths
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Whitepaper: The Audit World's Biggest Myths
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DCAA Audit Services

DCAA, DCMA, IG & Civilian Agency Audit Support

Our DCAA Audit Services are meant to help government contractors with their DCAA Audit Preparation and DCMA Audit. Companies seeking or performing under U.S. federal government contracts are subject to a wide range of oversight activities potentially performed by a host of government entities.  These oversight activities may include routine DCAA audits or DCAM reviews of a contractor’s financial and accounting data or narrowly focused, specialized investigations stemming from a variety of causes. Our DCAA compliance consultants can help you.

The government agencies performing these oversight activities are grouped below because each of them has different objectives or agendas and may require a unique approach to respond to, support, and resolve the government’s oversight purpose.

What is a DCAA Audit?

DCAA audits are reviews of financial representations designed to help determine whether contractor costs are reasonable and comply to contract terms. DCAA audits are triggered by a contracting officer’s or administrative contractor’s need for audit services to make decisions or regulatory compliance needs. DCAA does not conduct audits requested by contractors. DCAA only performs an audit if it has been requested or there is a need by a federal agency.

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What are the different types of DCAA audits?

A DCAA audit in the government contracting section is not just one singular audit each time. There are a few different audits used, and actually, there’s a DCAA audit for almost every type of accounting situation, with the more common ones including:

Incurred Cost Audits
Labor Evaluation Audits
Post-Award Audit
DCAA Public Voucher Audit
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How Our DCAA Compliance Consultants Can Help

Capital Edge has DCAA Audit Services that can assist with the response to and management and resolution of the government’s broad oversight activities in many ways. Our contract compliance DCAA audit and DCMA Audit services in this area include:

Identification, design, and development
Analysis, design and documentation
Support and liaison with all DCAA audits and DCMA review
Evaluation and performance of “mock audits” or other monitoring functions covering areas such as:
Key business systems
Timekeeping and labor distribution
Cost estimating and project reporting
Identification and implementation of required corrective action plans
Subcontractor or supply chain support
Preparation, submission, and audit support of the following:
Annual incurred cost proposals
Termination for convenience settlement proposals
Request for equitable adjustment proposals
Cost accounting standards (CAS) complianc
Interpretation and application of the FAR
Litigation Support
Truth-in-Negotiations Act (defective pricing)

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Frequently Asked Questions

Here are the latest questions being asked about DCAA Compliance

Will DCAA conduct virtual floor checks during the current environment?

Yes. In the current environment with an increase in Work at Home (WAH) employees, DCAA can conduct virtual floor checks

A virtual floor check, (or floor checks by phone), somewhat diminishes DCAA’s approach to floor checks. Floor checks are intended to be unannounced in order to interview an “uncoached” employee. Likely, virtual comprehensive floor check audits under the current increase in WAH activity, will be minimal. 

→Click-to-read more on DCAA Floor Checks 

 

What do you see contractors doing to prepare for a business system audit?

The main activity we see is performance of a ‘mock audit’ or other forms of self-assessment prior to the start of the audit.  The purpose of the mock audit or self-assessment is to determine if current internal controls are operating effectively and if compliance gaps may exist.  If gaps are identified, corrective action plans may then be developed and potentially put into action. 

This process demonstrates the monitoring function that is required as an element of a compliant business system and may be an effective portion of the system demonstration provided to the DCAA during the initial phases of the audit.

 

Is the DCAA auditing contractors receiving funds under the CARES Act?
Yes. The DCAA has two newly created audit objectives related to the CARES Act. As the CARES Act and funds received by contractors is a relatively recent thing, these audit objectives and forthcoming procedures are evolving and under development. However, we are seeing the DCAA involved in two main areas. First, the treatment of forgiven loans received under the Paycheck Protection Program (PPP). The DoD’s and DCAA’s position is that forgiven PPP loans are to be treated as credits under FAR 31.201-5. This means that contractors with cost reimbursement contracts may be required to credit to the government applicable portions of the forgiven loan proceeds. Second, the DCAA is currently developing audit procedures related to contractors submitting REAs under Section 3610 of the CARES Act. Contractors will need to provide comprehensive supporting documentation for requests for reimbursement and should follow the published DoD guidance.

During a business system audit, what steps can a contractor take to assist the DCAA with their pre-audit risk assessment process?

A few things are primary, and, if performed effectively should enhance the opportunity for a low or medium risk determination. First, timely and thorough responses to DCAA’s initial requests for information. Responses need to specifically address the DCAA requests or questions and demonstrate how the response satisfies the related compliance requirement or audit objective. Second, identification and submission of relevant written documentation demonstrating the use and effectiveness of key controls. Written documentation may be policies, procedures, process flows, or other material. And third, a comprehensive business system demonstration or walkthrough of the processes, procedures, and internal controls applicable to the principal components of the business system.

 

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DCAA Training

TRAINING & EVENTS

We have quite a few upcoming trainings that could benefit you and your team as you navigate the DCAA. Check out our existing events or contact us about custom training for your business today!
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DCAA Compliance Consultants At Capital Edge

About Capital Edge Consulting

Capital Edge government contract consultants support Government Contractors and Federal Grant Recipients. Our consultants specialize in the regulatory compliance matters you need.

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Whitepaper: The Audit World's Biggest Myths
Download Now
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