Changes in the DCAA

Wow, we are seeing a lot of changes in the government's auditing agency lately.  We have seen it written up twice in the last 18 months by the GAO.  Senator McCaskill (Chair of a Homeland Security and Governmental Affairs SubCommittee on Contracting Oversight) gave a searing evaluation of the DCAA when she was interrogating April Stevenson in a hearing on September 23, 2009 (http://www.youtube.com/watch?v=CnuiQhpAqf0).  Director Stevenson was fired within a month of this hearing.  We have seen the effects of all of this in the DCAA audits that Tech Biz has participated in recently.  The DCAA is becoming much more detail oriented, more serious and much less forgiving in their auditing.  There are more items that previously were overlooked that now are being written up.  Any discrepancy that is found is now being written up and it only takes one discrepancy to fail the entire system now.  This is serious.  It means that small businesses must be maticulous in making sure their accounting system is in complete and perfect compliance with the many FAR and GAAP regulations that the DCAA uses for audits.  Many small businesses don't have the expertise to know exactly what is required or the time to figure it out and still be profitable.  The margin for error has been reduced.  What is a small business to do?  Certainly they can look for personnel that have experience in government contracting.  Even then, how familiar will these people be with all the FAR regulations and the more recent changes?  If the small business is lucky enough to find someone with these qualifications, the cost of hiring such an individual is very high.  We think that small business should turn to consultants that only do this for a living.  This is the affordable way to get the expertise needed to comply with the regulations and pass an audit.