Reports, Audits, and Delays Oh MY! DCAA’s Report to Congress on FY 2011 Activity has Been Released!

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The results are out and the statistics tell the story. DCAA had a workforce of 4,225 auditors as of September 30, 2011 and released 7,390 audit reports, so let’s do the math:  each auditor released less than two audit reports.  Well, that’s impressive – no wonder those incurred cost audits are still open!  Only 349 incurred cost reports were release in FY2011.  How many do you think were submitted in 2011?  My guess is a lot more than 349.  The average incurred cost audit took 965 days from the start of the audit to the release of the report.  YES, contracting community, I feel your pain and the statistic confirm that we have a problem.  DCAA claims the lack of incurred cost audits and the time lag in the release of reports was due to a lack of staffing and inadequate incurred cost proposals by contactors – yes, that means you. 

DCAA has a plan to “resolve each outstanding incurred cost submission by 2016.”  That is a bold statement and, based on 2011’s results, there is a lot of work to do.  Their plan includes the following:

  • Hiring more auditors
  • Revising the low risk sampling process.  This will allow DCAA to close out low risk incurred cost proposals.  Your proposal will only be considered low risk if adequate, below a “to be determined” dollar threshold, and not include any other “to be determined” DCAA  risk factors.

Now onto another topic: let’s talk about questioned costs.  DCAA states: “the return on the taxpayers’ investment in DCAA was approximately $5.80 for each dollar invested.”  Well, we know based on the low number of reports released, they must be questioning a lot of cost.  Here is another startling fact: in 2001, DCAA questioned 2.19% of costs to dollars examined.  Fast forward to 2011 and we see that DCAA questioned 9.85% of costs to dollars examined. 

The report is a great read for contractors and those who follow the industry, and it confirms what we already knew.  On a positive note, the report is the first step in the corrective action to transform the agency – we hope for the better.

To access the full report please follow this link and enjoy your reading!

Please contact Nicole Mitchell at 301.222.8231 or nmitchell@aronsonllc.com for DCAA compliance support.

About the author: Nicole Mitchell, CPA, is a Partner in Aronson LLC’s Government Contract Services Group, where she provides consulting and accounting services to government contractors, including financial regulatory compliance, contract pricing, and complex cost accounting structures.

About Nicole Mitchell


Nicole Mitchell joined Aronson LLC in 1998 and serves as a Partner in Aronson’s Government Contract Services Group. She received a Bachelor of Science in Accounting from Frostburg State University and a Masters in Business Administration from Mount Saint Mary’s College. Nicole specializes in accounting and financial issues impacting government contractors. She has a broad-based background in generally accepted accounting principles and cost principles related to government contractors including the Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS). Nicole provides consulting and accounting services to government contractors in the areas of financial regulatory compliance, contract pricing, and complex cost accounting structures. She has in-depth knowledge of the key financial business systems and compliance risk unique to government contractors. Nicole has been a guest speaker on various financial and government contracting topics for such organizations as the AICPA, MACPA, Deltek Insight Conference, and the Howard County Chamber of Commerce. She co-authored a Thompson RIA reference manual for controllers “Doing Business with the Federal Government” and is a regular contributor to Aronson’s Fed Point blog.

  • DCAAAuditor

    As a DCAA Auditor, I can say “you don’t know what you are talking about” and your opinion is strictly that. Do you even know what those audits are for and what those numbers mean? And by the way, I’ve gotten out 5 audits during the last 12 months, saving the taxpayer over $20million in contractor inflated costs. What have you done for the average taxpayer lately? It’s a shame that most of us who go into our line of work and work for DCAA do it out of patriotism and our reward is shabby treatment by the buying commands, the contractors, and the so-called news medias. We are there with the warfighters and there for the disasters that hit our people giving of ourselves without expecting huge bonuses and rewards (which we do not get). Maybe you should bully the bullies. If the majority of contractors I have audited weren’t busy padding their proposals and slow-rolling and the buying commands I’ve worked with were not taking shortcuts to avoid Federal Regulations then we wouldn’t have to spend unprecedented amounts of time on audits that should be fairy quick. We can only work with what we’ve got and contractors are best known for slow-rolling us by playing dumb, controlled chaos, and the attitude that they don’t have to play nice with DCAA. DCAA is treated as the scapegoat for nonexistent oversight of the buying commands and contractors. But hey if it makes you feel important…………………………

    • Nicole Mitchell

      The numbers came straight off the report from DCAA to Congress.

2 thoughts on “Reports, Audits, and Delays Oh MY! DCAA’s Report to Congress on FY 2011 Activity has Been Released!

  1. DCAAAuditor

    As a DCAA Auditor, I can say “you don’t know what you are talking about” and your opinion is strictly that. Do you even know what those audits are for and what those numbers mean? And by the way, I’ve gotten out 5 audits during the last 12 months, saving the taxpayer over $20million in contractor inflated costs. What have you done for the average taxpayer lately? It’s a shame that most of us who go into our line of work and work for DCAA do it out of patriotism and our reward is shabby treatment by the buying commands, the contractors, and the so-called news medias. We are there with the warfighters and there for the disasters that hit our people giving of ourselves without expecting huge bonuses and rewards (which we do not get). Maybe you should bully the bullies. If the majority of contractors I have audited weren’t busy padding their proposals and slow-rolling and the buying commands I’ve worked with were not taking shortcuts to avoid Federal Regulations then we wouldn’t have to spend unprecedented amounts of time on audits that should be fairy quick. We can only work with what we’ve got and contractors are best known for slow-rolling us by playing dumb, controlled chaos, and the attitude that they don’t have to play nice with DCAA. DCAA is treated as the scapegoat for nonexistent oversight of the buying commands and contractors. But hey if it makes you feel important…………………………

    June 12, 2012 at 1:56 pm
    1. Nicole Mitchell

      The numbers came straight off the report from DCAA to Congress.

      June 12, 2012 at 3:44 pm

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