We are continuing to see more discussion about the DCAA and whether or not it should continue to function out of the Department of Defense or whether it should be it's own independent agency. One side says that there is a conflict of interest of sorts. The DCAA lacks independence over the contractors that it oversees because the Defense Department is doing business with those contractors. They further believe that pressure from outside groups is the reason for shoddy audit practices and approval of substandard systems. This seems to be supported by the fact that when the GAO reviewed 69 audits performed between 2004 & 2006 they found that 65 of these audits were faulty in some regard. This has caused the DCAA to issue "get tough" messages to their auditors (see our blogs; "DCAA to get tougher (again) and may become more influential" and "DCAA 2008 Year End Guidance - Happy Holidays, Government Contractors"). There are several US senators, namely Sen. Tom Coburn, R-Olka. and Sen. Joe Lieberman, I-Conn., that want to re-design the DCAA and make them an autonomous agency to cure the problems. The comptroller of the Pentagon, Robert Hale, strongly opposes this move and feels that the DCAA should continue to report to him. The DCAA itself has not only issued the above referenced "get tough" directives to their auditors but they are also prioritzing their audit plan for 2010 to focus on high-risk, high-dollar value audits. They also have changed the way they evaluate their auditors, focusing more on adherence to audit standards than to the number of audits performed. All auditors have also been given refresher training focusing on increasing the quality of the audits.
So, where does all of this lead us? I think it means that it will be more difficult to pass a DCAA audit than it has been in the past. In addition, if the DCAA is made more autonomous it will definately wield more power and be more involved in all government contracting.