DCAA Audit: the term alone can strike fear in any contractor...understandably so, when typically, the small business contractor may encounter several different types of DCAA audits of their accounting system. While some audits (like pre-award audits for an SBIR Phase II grant) may not be as involved as others, every audit can be stressful and potentially harmful if not properly prepared for.
Cost reimbursable type awards almost always trigger at least one type of audit, if not more than one audit. Many Time and Material contracts or labor grade contracts also can generate the need for an audit. Basically, the government is more likely to audit the contractor when they perceive the risk to be high enough to warrant their time. The Government will want you to provide assurance that you operate your system consistent with Government regulated accounting procedures (FAR, DFARS, CFR, DCAA, GAAP). Government accounting rules are sometimes very different from accounting principals used in commercial business. Interacting with the DCAA, NIH auditors or even third party auditors is very confusing to accountants and non-accountants not familiar with the methodology of Government auditors. We will assist you, and also engage the auditors for you if you desire.
Occasionally, the Government contracting officer requests that DCAA review our SBIR Phase I client’s proposal cost to verify that proposed costs are reasonable and allocable. This review, or audit, is often conducted as an on site visit by a DCAA auditor who asks for information (such as indirect rates backup). The audit typically causes great concern for our clients. Unless we can intercede on their behalf, this may result in the decrease in the price of our client’s proposal. We know how to deal with the DCAA.
Incurred Cost Reports are required to be submitted to the government 6 months after the end of the contractor's fiscal year for cost reimbursable type contracts. The government will audit these reports as well. ReliAscent can not only help you prepare your Incurred Cost Report, but ReliAscent will also help you through an audit of this report.
One of the most common requests we get from contractors facing an Audit, or just those looking to prepare for a possible audit, is for our most popular white paper, "The DCAA Audit Preparation Checklist." This helpful checklist (updated to version 2.0 in 2013), can help guide you through the stressful process of an audit, but it is important that you also contact our DCAA Compliance experts to ensure you are not facing the DCAA alone.
If you are facing a pending audit, or to learn more about our Audit Support services, please contact us immediately.