Recently, DCAA reminded its auditors that access to contractor employees is a “routine and established audit procedure” which is necessary to comply with GAGAS (Generally Accepted Auditing Standards). While the initial focus of the guidance to auditors relates to the well-known “floor check” procedure, it also opines that DCAA’s position is that contractors are required to allow access to any employee during any audit who might be a SME (Subject Matter Expert) on contractor processes and procedures, or data provided to the auditor. DCAA is now focused on this matter because of past criticism by agencies having oversight of its performance. The Agency’s objective is to ensure auditors have met the GAGAS requirement to “…obtain sufficient evidence to provide a reasonable basis for the conclusion expressed in the report.”
DCAA believes FAR Part 52.215-2, “Audit and Records”, provides access to contractor employees, as well as records and data. However, they have apparently encountered some Government contractors who do not agree with their interpretation of the FAR; although, the FAR Part does state at (d)(1) that the Comptroller General, or designated representative will have access to current employees. We do not have visibility into the disagreements DCAA has encountered with contractors on this issue. However we do know that, when DCAA is denied access to information they consider necessary, they are prone to respond in a number of methods, all of which lend to poor relationships between contractors and their contracting officers.
Join Capital Edge Industry experts May 21 in San Diego, CA for DCAA Hot Topics – Understanding the Current Audit Environment & Contractor Challenges. Government Contracting experts at Capital Edge Consulting will review current DCAA Audit focus areas, trends, and share their real world experiences with current and ongoing DCAA Audits.