Government Voucher Audits
There has been a trend in the last 5 years that the DCAA is auditing fewer of the annual Incurred Cost Proposals (ICP's). This is based on the shear backlog as well as the risk factor to the government. Small firms are less risk and therefore fewer of their ICP's are being audited. As we all learned in physics class, for every action there is an equal and opposite reaction. In this case it looks like the reaction means there will be much more scrutiny on invoices and vouchers. We have learned that there has been a recent DCAA wide training relative to how to monitor vouchers and scrutinize them more closely. We have noticed that this is translating into more requests from auditors relative to the vouchers than ever before. Good advice to contractors at this point is to scrutinize the invoice thoroughly prior to submitting it. Math errors will raise a red flag and draw attention. This attention could then uncover other issues. Not only are math errors red flag warnings, but wrong attachments or incomplete attachments can cause a flag to go up. Also, carefully check calculations to make sure they are correct and have the proper basis.
We have noticed that the DCAA might also request more documentation to support the voucher. We have had to supply not only a current month job cost report but also a project to date job cost report. For some contractors this might not be something your current system does and could cause some stress. If this is the case, please give us a call, we can help in that regard. Our systems routinely calculate not only current month job costs but year-to-date as well as contract-to-date information. We have even seen at least one DCAA office require that costs be documented and reported on a CLIN level. Again, this can be cumbersome if you are not prepared.
Give us a call if you have any questions on this new trend or want to discuss it further.