Incurred Cost Audit 

Getting Through Your DCAA ICE Audit

It’s a universal truth for all accounting: the best preparation for an audit is an existing, systematic, consistent approach to your accounting system with strong internal control. Elements of this approach include:

  • Understanding your regulatory environment
  • Understanding your contracts
  • Knowing how your accounting system operates and meets DCAA rules
  • Documenting costs appropriately
  • Creating appropriate controls to identify and isolate costs deemed unallowable (FAR Part 31)

Steps to take now

Incurred Cost Audit

If you haven’t seen it yet, the DCAA will send you a request for information that ensures the audit package is ready for their review. This doesn’t necessarily means an audit is near. However, this notice is a good signal to begin dusting off previous submissions or to submit any updates to your Incurred Cost proposal (ICP). There may be a number of unique situations, cost treatments, or calculations that will require you to refresh your memory.

If you haven’t got a notice yet from the DCAA, download the latest DCAA checklist for ICP adequacy.

Get the government playbook

The DCAA Audit Manual is a free public resource and is the DCAA’s playbook on conducting all audits, including ICP audits. Pay particular attention to Chapter 6.

Be prepared to defend multiple years

The DCAA has in the past audited multiple ICPs covering some of all of a contractor’s fiscal years pending final indirect cost review. Be sure to review all ICP submissions for potential updates and unique cost treatments.  

It’s never too early to get a head start! There are a number of ways you can be proactive! 

  • Call ReliAscent today at 303.999.3802, for a free evaluation!
  • Download and review any of our free Incurred Cost checklists on this and other related pages.
  • Send us an email that includes some basic information: your company's size, number of employees,number of government jobs and type of contracts, the type of accounting software you use, whether or not you did provisional rates last year, and the type of rate structure you've used in the past (1, 2 or 3 rate system).