Category Archives: Mary Karen Wills

GAO Audit Report

By: Mary Karen Wills

GAO-13-131: DoD Initiative to Address Audit Backlog Shows Promise, but Additional Management Attention Needed to Close Aging Contracts

The Senate Armed Services Committee Report accompanying the National Defense Authorization Act for FY2012 directed the Government Accountability Office (GAO) to review the criteria and procedures for conducting incurred cost audits. This audit stems from the large volume of contracts that the Department of Defense (DoD) has not closed out on a timely basis. Closing contracts within a required time frame can limit the government’s exposure to certain financial risk. One reason why contracts are not being closed timely is the large backlog of incurred cost audits that must be completed by the Defense Contract Audit Agency (DCAA). GAO assessed DCAA’s efforts underway to reduce the backlog of incurred cost audits and the challenges DoD faces in addressing the contract closeout backlog.

DCAA implemented an initiative that revised its focus on performing high-dollar-value or high-risk-incurred cost audits. The thresholds were raised from $15 million to $250 million for an automatic audit of incurred costs. DCAA revised its high-risk criteria and reduced the number of low-risk audits that would be randomly sampled. GAO found this initiative promising, but found that the DCAA has not fully developed the measures by which it will assess whether this initiative is reducing the backlog in a way that protects taxpayers’ interests. GAO recommended that DCAA develop a plan with time frames and measures to assess its progress toward achieving these objectives.

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Inspector General – U.S. DoD

By: Mary Karen Wills

Semiannual Report to the Congress
April 1, 2012 to September 30, 2012

The Department of Defense (DoD) inspector general (IG) issued 79 reports identifying $2.8 billion in potential monetary benefits during this period. The Defense Criminal Investigative Service conducted investigations that resulted in 72 arrests, 167 criminal convictions, 37 suspensions, and 136 debarments, for a return of $3.3 billion to the U.S. government. Of top concern is contract oversight and training and equipping the Afghan National Security Forces, which are the critical means of establishing security and stability in Afghanistan.

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GAO Review of Contractor Employee Compensation

By: Mary Karen Wills

The U.S. Government Accountability Office (GAO) is performing a review of government contractor employee compensation. The report is due to Congress by May 2, 2013. Congress has requested that the GAO assess the impact of proposed regulations included in the 2013 National Defense Authorization Act that would further cap-allowable executive compensation for contractors. GAO must assess the potential impact of a new cap on the contractor industry base. In addition, GAO will assess the inconsistencies of current caps on executive compensation across federal agencies.

GAO is currently soliciting input. To provide comments, go to http://www.gao.gov/

The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.

OMB Circular – Proposed Guidance

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Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements (including Single Audit Act)

By: Mary Karen Wills

The complete text of this proposal and a crosswalk of policy changes from the existing guidance are available on the OMB website under Proposed Policies.

This guidance is applicable to grants and cooperative agreements that involve state, local, and tribal governments, as well as institutions of higher education and nonprofit organizations. The proposal rule seeks to consolidate and streamline the requirements from OMB Circulars A-21, -89, -110 and -122. In addition, Circulars -50, -89, -102, and -133 on audits would be consolidated and streamlined. This guidance seeks to minimize the burden associated with compliance and audits for the grants and cooperative agreements with the aforementioned organizations. The goal would be to replace these eight circulars with one document, resulting in a single set of rules across these entities that currently have varying degrees of requirements.

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