The article reports that "GAO focuses much of its attention on a lack of quantitative testing," and that the report will find that "auditors failed to review a sufficient amount of transactional data such as payroll records, vendor receipts and system invoices." The article notes, however, that GAO may have failed to link these alleged audit failures to any monetary harm suffered by the DOD. The article quotes a source asking, "'What did GAO find that the DCAA missed? ... The answer is, there is no answer. They did not explain how the additional testing would have affected the results.'"
According to the internal DCAA memoranda, GAO will recommend that DCAA should be more independent from other DOD agencies "with greater power similar to that of an inspector general." It is not clear that giving DCAA more independence and/or subpoena power will result in higher-quality audits. To the contrary, the Government Executive article quotes an unnamed California DCAA auditor as saying, "The audits DCAA [are] issuing now are untimely and poor in quality. ... The metrics still control the audit risk, despite the better judgment of the senior auditors that do all the real heavy work at DCAA."
Although the final GAO report has yet to be issued, if the GovExec.com report is accurate, DCAA could be in for another rough time. After the 2008 GAO report, DCAA implemented "reforms" that resulted in a loss of auditor discretion, harsh audit approaches, a proliferation of "flash" audit reports, and a bias toward disapproval of contractor internal control systems. Consequently, DOD contractors should be alert for future changes to audit guidance that impact how they do business with the Department of Defense.
The GovExec.com article is here.
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