US Government Oversight - Thresholds
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Contents |
Introduction
Department of Defense
The Defense Contract Audit Agency (DCAA) under the Department of Defense (DoD) Comptroller plays a critical role in contractor oversight by providing auditing, accounting, and financial advisory services in connection with DoD and other federal agency contracts and subcontracts.
Incurred Cost Claim Proposals
DCAA has certain procedures they follow when determining audit risk, and how to perform audits of Incurred Cost Claim Proposals. The guidance was recently updated to reflect a shift towards limiting audits of Incurred Cost Submissions under a certain threshold.
MRD 13 - PPD-021(R)[1]
This Memorandum for Regional Directors:
- Revised guidance on low risk Incurred Cost Proposals less than $250M ADV
- Required FAO's to assess or reassess risk for all adequate[2] proposals under $250M ADV where fieldwork had not been started.
Changes from Previous Guidance
- Revised threshold for significant last completed incurred cost year questioned costs
- Identified other risk factors for low risk determinations
- No sampling of low risk proposals under $1M ADV
Low Risk Sampling Percentages
| Low Risk Adequate Proposals by ADV | Low Risk Sampling Percentages |
|---|---|
| Less than $1M | 0% |
| $1M to $50M | 5% |
| $50M to $100M | 10% |
| $100M to $250M | 20%, but mandatory audit every 3rd year (if not selected) |
| Greater than $250M | 100% |
