DCAA Oct 28 issued clarifying guidance of an Oct 11 memo from the Acting Director of the Defense Procurement and Acquisition Policy (DPAP).  The guidance alludes to the DPAP memo that states administrative leave granted to contractor employees due to Hurricane Katrina are to be considered a fringe benefit and allowability should be determined under FAR 31.205-6, Compensation for personal services.  DCAA guidance states the DPAP is similar to DCAA Contract Audit Manual at 7-1224, Administrative Leave Due to Weather-Related Closures where allowability of such payments should be considered on a case-by-case basis.

The Guidance states the DPAP memo also alludes to “other unusual contractor expenditures” which is not specified but adds it includes such costs as temporary housing for employees who lost their personal residences, subsistence payments, temporary lodging and subsistence while under evacuation orders and travel costs to and from safe havens where the costs can far exceed administrative leave.  The guidance also states auditors should assist ACOs to obtain advance agreements for allowability of employee assistance costs and auditors should ensure that all avenues of potential insurance recoveries have been exhausted before the government pays for Katrina-related costs (MRD 05-PAC-065(R).

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