Audit Guidance on Reconciling Billed Costs to Contractor's Accounting Records when Reviewing Interim

DEFENSE CONTRACT AUDIT AGENCY DEPARTMENT OF DEFENSE 8725 JOHN J. KINGMAN ROAD, SUITE 2135 FORT BELVOIR, VA 22060-6219 IN REPLY REFER TO PPD 730.5.26.1 April 15, 2009 09-PPD-006(R) MEMORANDUM FOR REGIONAL DIRECTORS, DCAA DIRECTOR, FIELD DETACHMENT, DCAA HEADS OF PRINCIPAL STAFF ELEMENTS, DCAA SUBJECT: Audit Guidance on Approving and Rescinding Contractor’s Authorization to Participate in the Direct Bill Program for Major Contractors At the June 2009 Executive Steering Committee Meeting, Regional Directors and the Director, Field Detachment, will report on the status of FAO actions taken in response to this MRD. SUMMARY By May 29, 2009, FAOs cognizant of major contractors with billing systems that have been approved for direct billing should ensure that those systems have not been significantly modified or the contractor has not implemented a new system since issuance of the latest adequate audit opinion. In addition, the accounting system and billing system may be so interconnected that a major change to the accounting system will impact Government billings. If a billing system or accounting system that affects the billing system has been significantly modified or a new system has been implemented, the following steps should be taken: • Auditors should immediately provide verbal and written notification to the appropriate contractor level (e.g., the Chief Financial Officer) that their authorization to ...