The Defense Contract Audit Agency (DCAA) maintains multiple audit programs to monitor and verify government contractor compliance.  DCAA audit programs may occur before, after, or during contract performance through Preaward Audits, Postaward Audits, and Contractor Business System Audits. DCAA is chartered with identifying and evaluating all activities that contribute to or impact proposed or incurred costs of Government contracts.

DCAA’s major areas of emphasis include: DFARS Business Systems such as Accounting Systems, Estimating Systems, and Purchasing Systems; management policies and procedures; accuracy of contractor forward pricing and incurred cost representations; adequacy and reliability of records and accounting systems; and contract compliance with contractual provisions having accounting or financial significance such as the FAR Cost Principles (FAR Part 31), the Cost Accounting Standards (CAS), and clauses pertaining to the Truth in Negotiations Act (TINA).

The timing of DCAA’s audit will depend on the risk profile of your organization and its contracts.  DCAA uses a variety of risk assessment tools to determine which areas of regulatory risk warrant audit attention.  In addition, Contracting Officers have very broad discretion as to where audit resources should be deployed.