Pentagon Clerks Entered Wrong Data for Post-Contract Audits Much of the Time
Watchdog finds 82 percent of sampled records contained errors.
The Defense Department’s contract audit follow-up records contained inaccurate data in as many as 100 of 1,000 data fields sampled, the Pentagon’s Office of Inspector General found in a new report.
In 50 of the Defense Contract Audit Agency’s contract follow-up records tested by the watchdog, 41 (82 percent) had errors in one or more data fields, said the report.
Data errors in contract follow-up records “adversely impact DOD management’s ability to rely on CAFU as a tool for tracking contracting officer actions on DCAA audit reports,” the report said. The frequency of such errors demonstrates the need for both DCAA and the Defense Contract Management Agency to “improve related procedures and internal controls.”
Defense financial components use contract follow-up records to track and manage the actions of contracting officers in response to DCAA audit reports that, in fiscal 2014 alone, resulted in $10.7 billion in questioned costs in proposals from Pentagon contractors. The accuracy of the follow-up reports “is important to ensure reported DCAA audit findings are resolved timely and appropriately, and to correctly report the status of actions taken on the reported findings to Congress,” the IG wrote.
Under a departmental instruction, contracting officers are required to resolve reported audit findings within six months, and complete the disposition of audit findings within 12 months.
But errors have long been a challenge. In one case, a CAFU record showed a questioned cost of $400,565, but the DCAA audit report had actually identified a questioned cost of $435,396. The result of 10 similar inaccuracies was a $2,624,658 overstatement of questioned costs.
The reason for the errors ranged from inaccurate audit information provided by DCAA in its monthly report list, or incorrect status information entered in the follow-up records by DCMA contracting officers, the report said. Also, “DCAA lacks a procedure for notifying DCMA of corrections that need to be made for data residing in CAFU.”
The IG recommended that both DCAA and DCMA provide refresher training on the departmental instruction and emphasize the difference between audit reports that are reportable and not reportable. The two agency directors should also modify procedures and internal controls to prevent contracting officers from entering cost-questioned amounts that exceed the DCAA report of the same costs, the IG said.
DCAA and DCMA and largely agreed.