Accounting System, Cost And Accounting, DCAA Relations, Incurred Cost Proposals

A World Without DCAA

Supporting a couple of audits where the CO’s kicked DCAA out the door and replaced them with outside accounting firms.

I maintained from the onset that a world without DCAA was just going to make our lives more complicated and frustrating (see “The Consequences of a World Without DCAA”). Being the pessimist I am, it is usually a better day when I am wrong. I wish events would prove me wrong now, but that does not appear to our future.

I am sure I will be posting more of these over the next several months but let’s start with Incurred Costs Proposals 101, a class one of the major accounting firms need to provide for their auditors spending our tax dollars.

This was the silliest of a series of fairly ignorant questions sent one of my clients recently by an major CPA firm playing at being DCAA:

  1. The original contract document “DOE Contract XX-XX99-123456789.pdf” includes a maximum G&A rate of 4.92%. Is this accurate, and if so, why is a 5.0% G&A rate used in the 2007 ICS?

The only silly item was the response from the partner when they put us on hold to find him and address our inquiry on this question.

His response: What this question actually means is: did you bill at the actual rates or the provisional rates. He then went on to claim that this was off of some internal developed worksheet of theirs. I guess he did not know that they his fellow auditors had already disclosed that they were muddling through the DCAA Adequecy Checklist.



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