21000 - Audit Program - Cost Elements

Master Document – Audit Program Activity Code Cost Element Version No. 1.5, updated August 2011 B-1 Planning Considerations Purpose and Scope This standard audit program assists the auditor team in planning and performing the audit of price proposals to evaluate the proposal for its compliance with FAR Part 15 and 31, as well as applicable CAS provisions. The program steps should be tailored, as appropriate. For audit areas with multiple sections (i.e. rates), the auditor is permitted to remove the sections that are not relevant to the review based on the documented risk assessment. The audit program should reflect an understanding between the auditors and supervision as to the scope required. This program provides specific procedures for auditing price proposals submitted by contractors in connection with the award, administration, modification, or re-pricing of Government contracts when the contracting officer requests an audit. Planning Considerations 1. Determine whether this pricing action has already been awarded. If this is a subcontract proposal, determine whether the prime contract pricing action has been awarded. When the contract instrument is fixed-price with no downward adjustment clause, the Government derives no benefit from either prime or subcontractor audits performed after negotiation of the prime contract. If the auditor becomes aware that a requested pre-award audit pertains to a fixed-price ...