DCAA – Fort Walton Beach Branch Office

13 Kelly AvenueSuite 1

Fort Walton Beach, FL 32548850-302-0180

Topics to Discuss Organization Profile DCAA Mission Statement Agency Priorities/DCAA Strategic

Plan GAGAS Independence Contracting Officer Assistance

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DCAA Organization Profile At the start of FY 2011, DCAA had

approximately 4,700 employees and 112 FAOs The workforce has two components:

• Auditors (85 percent) and professional support staff (15 percent)

Most of the auditors are assigned to an FAO or sub-office

About 28 percent of the auditors are Certified Public Accountants and about 29 percent have advanced degrees

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DCAA Organization Profile (Cont.)

Our aim is to continue to ensure that contracting officers are provided with: • high quality and timely audit reports, • advice, and • negotiation support to establish fair and reasonable

contract prices. Also, to make sure that during contract

performance, DCAA auditors continue to verify that results and outputs of contractor business systems comply with applicable rules, regulations, and contract terms and, as necessary, recommend recovery of contractor overbilling.

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The DCAA, while serving the public interest as its primary customer, shall perform all necessary contract audits for the Department of Defense and

provide accounting and financial advisory services regarding contracts and subcontracts to all DoD components responsible for procurement and

contract administration. These services shall be provided in connection with negotiation, administration, and settlement of contracts and subcontracts to

ensure taxpayer dollars are spent on fair and reasonable contract prices. DCAA shall provide contract audit services to other Federal agencies, as

appropriate.

Defense Contract Audit Agency Mission Statement

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Strengthen DCAA’s Talented Workforce Deliver High Quality/Timely Services

and Products Requirements/Workload and Resources Support Overseas Contingency

Operations New Business System Rule Improve Communications and Working

Relationships with Stakeholders

Agency Priorities

Incurred Cost Backlog

DCAA developed a risk-based approach to working down backlog in a efficient manner: Proposed increase staffing Dedicated audit teams (FAO Manager, Supervisors, and

auditors) Revising guidance to perform audits covering multiple

contractor years in a single assignment at certain contractor locations

Developing revised incurred cost audit programs Delivering an incurred cost auditing refresher training

course Continue working with DoD on strategies to better align the

limited DCAA resources to the higher risk contracting areas

Contractor Business Systems The interim Business System Rule was issued on May 18,

2011 Defines contractor business systems as the contractor’s

Accounting SystemEstimating SystemMaterial Management and Accounting System (MMAS)Purchasing SystemProperty ManagementEarned Value Management System (EVMS)

Includes a contract clause that requires the contracting officer to apply a percentage of withhold when a contractor’s business system contains a significant deficiency

Contractor Business Systems DCAA will report on compliance with the

criteria in DFARS DCAA Reports will identify significant

deficiencies – defined by the interim Business System Rule as:Shortcomings in the system that materially

affects the ability of officials of the DoD to rely upon information produced by the system that is needed for management purposes

Contractor Business Systems

Contracting Officers will use DCAA’s report in making an initial determination that significant deficiencies exist

The Contractor has 30 days to respond in writing to the initial determination

The C.O. will evaluate the Contractor’s response and make a final determination as to whether significant deficiencies exist. This final determination will be provided to the Contractor in writing.

If the C.O. determines there are significant deficiencies, the final determination will include a notice to withhold payments.

DCAA Strategic Plan

Strategic Plan Goal 4: Effective working relationships with DCAA external stakeholders

Objective: Increase coordination and communication with the acquisition community to gain a better understanding of each other’s requirements.

Strategies: • Establish action plans that require regular and recurring briefing

sessions with the acquisition community. • Determine through an annual survey the requirements of the

acquisition community, level of knowledge about DCAA initiatives/products/services, degree of satisfaction with these services, and develop a follow-up action plan to address areas that require additional improvement based on survey results.

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DCAA Strategic Plan

Strategic Plan Goal 4: Effective working relationships with DCAA external stakeholders

Strategies (Cont.):

• Identify communication processes that can be used to: Promptly identify inadequate contractor submission/assertions. Reinforce benefits of open and constant communication with the

acquisition community during the audit in order to deal with ongoing issues.

Inform auditors of results of leadership meetings and surveys so they understand customer requirements, concerns, and priorities.

Convene an Agency-wide Quality/External Stakeholder Conference to highlight the coordination and improvement of DCAA external stakeholder relationships, showcase DCAA’s organizational vision, goals, and mission, and obtain feedback on attendees’ experience with DCAA.

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GAGAS Independence

3.03 Auditors and audit organizations must maintain independence so that their opinions, findings, conclusions, judgments, and recommendations will be impartial and viewed as impartial by objective third parties with knowledge of the relevant information.

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GAGAS Independence

3.03 Auditors should avoid situations that could lead objective third parties with knowledge of the relevant information to conclude that the auditors are not able to maintain independence and thus are not capable of exercising objective and impartial judgment on all issues associated with conducting the audit and reporting on the work.

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Defense Contract Audit Agency

Additional information on DCAA and Points of Contact available at

www.dcaa.mil