• Dealing with the Government

The Defense Contract Audit Agency, because of their Defense Department contracts or contracts with other agencies that use the audit agency, audits most of the contractors in the survey. 51% of respondents described their relationship as good, 37% as excellent while 12% described it as fair or poor. When asked if their relationship with DCAA has changed, 86% said it had stayed the same, 6% reported the relationship had deteriorated while 8% said it had improved. The most frequent types of costs questioned by DCAA are executive compensation (18% citing this as an audit issue), consultant costs (15%), legal expenses (5%), bonuses and incentive compensation (6%), employee morale (6%), indirect cost allocations (13%) and labor charging (16%). Most frequently cited violations of cost accounting standards were CAS 403, home office expenses (18% cited this as a compliance issue which was up significantly from 5% last year), CAS 405, Unallowable costs (11%), and CAS 410, G&A (15%) up from 3% last year. 93% of surveyed companies reported that DCAA did not question a significant amount of costs while 7% reported either a significant or very significant amount. Of those companies experiencing audit issues, 35% were very satisfied with the resolution of the issues, 52% were somewhat satisfied and 13% were not satisfied.

{TAG_FORM_TITLE}