14980 - Other Audit Guidance - Internal Control Matrix for Audit of Indirect and Other Direct Cost System

INTERNAL CONTROL MATRIX FOR AUDIT OF INDIRECT AND OTHER DIRECT COST SYSTEM CONTROLS Version No. 4.1 June 2006 Control Objectives Example Control Activities Audit Procedures 1. CONTRACTOR COMPLIANCE REVIEWS Management periodically evaluates and updates indirect/other a. Evaluate the contractor’s policies and procedures to Management should periodically perform independent direct cost policies and procedures to ensure that they comply determine if periodic management reviews of compliance reviews of the Indirect/ODC system policies and with applicable laws and regulations. with Federal laws and regulations occur. procedures to ensure that they comply with applicable b. Evaluate the nature and extent of management’s most laws and regulations, have been implemented, and are recent review of established policies and procedures to working effectively. determine if it complies with established review policies and procedures. Periodically evaluate actual indirect/other direct cost system c. Evaluate the contractor’s policies and procedures to practices to determine if established policies and procedures determine if they require periodic management review of have been properly implemented and are operating effectively. actual Indirect/ODC system practices. The following areas warrant special consideration: • Employee knowledge and compliance with policies d. Evaluate recent management review activity to determine and procedures. if the contractor is ...