Evaluation of Incurred Cost Audits Performed by Non-Federal Auditors for Compliance with the Government Auditing Standards

Rec 1.a. The DoD OIG recommended that the Defense Contract Audit Agency Director: determine whether the following eight audit reports that the non-Federal auditors issued without sufficient evidence should be rescinded or revised.
2019J10100001
2018A10100008
2020S10100003
2019P10100003
2019R10100001
2020M10100002
2018K10100732
2020K10100432

Rec 2.a1. The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director review the performance work statement for the contracts with the non-Federal auditors to determine if it provides Defense Contract Audit Agency contracting officer's representatives with clear guidance for reviewing the non-Federal auditor work for compliance with Government Auditing Standards.

Rec 2.b1. The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director: Based on the results of the review in Recommendation 2.a, develop and implement a plan to make any necessary revisions to the performance work statement for future contracts with the non-Federal auditors, to ensure that Defense Contract Audit Agency contracting officer's representatives possess the authority and responsibility to review non-Federal auditor work for compliance with Government Auditing Standards before the DoD approves or accepts non-Federal audit results.

Rec 2.c.1.1. The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director develop and implement a plan to revise the performance work statement in future contracts with the non-Federal auditors to require that non-Federal auditors submit the sample plans before fieldwork begins, along with the audit plan.

Rec 2.c.2.1. The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director develop and implement a plan to revise the performance work statement in future contracts with the non-Federal auditors to require that the Defense Contract Audit Agency contracting officer's representatives review non-the Federal auditor sample plans for compliance with Government Auditing Standards.

Rec 3.a1. The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director, require non-Federal auditors to include in the quality control plan their planned procedures for complying with Government Auditing Standards, including Government Auditing Standards 1.18a, "Examination."

Rec 3.b1: The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director, require non-Federal auditors to include in the quality control plan their planned procedures for complying withGovernment Auditing Standards, including Government Auditing Standards 7.13, "Results of Previous Engagements."

Rec 3.c1: The DoD OIG recommended that the Defense Contract Audit Agency Director in coordination with the Defense Logistics Agency Director, require non-Federal auditors to include in the quality control plan their planned procedures for complying withGovernment Auditing Standards, including Government Auditing Standards 7.14, "Investigations or Legal Proceedings."

Rec 3.d1: The DoD OIG recommended that the Defense Contract Audit Agency Director in coordination with the Defense Logistics Agency Director, require non-Federal auditors to include in the quality control plan their planned procedures for complying withGovernment Auditing Standards, including Government Auditing Standards 7.34, "Examination Engagement Documentation."

Rec 3.e1: The DoD OIG recommended that the Defense Contract Audit Agency Director, in coordination with the Defense Logistics Agency Director, require non-Federal auditors to include in the quality control plan their planned procedures for complying withGovernment Auditing Standards, including Standards for Attestation Engagements Number 18, section 205A.31, "Sampling."

Rec 4.a: The DoD OIG recommended that the Defense Contract Audit Agency Director modify their quality assurance surveillance plan checklist to include a review of workpapers for compliance with Government Auditing Standards, including Government Auditing Standards 1.18a, "Examination."

Rec 4.c: The DoD OIG recommended that the Defense Contract Audit Agency Director modify their quality assurance surveillance plan checklist to include a review of workpapers for compliance with Government Auditing Standards, including Government Auditing Standards 7.14, "Investigations or Legal Proceedings."

Rec 4.e: The DoD OIG recommended that the Defense Contract Audit Agency Director modify their quality assurance surveillance plan checklist to include a review of workpapers for compliance with Government Auditing Standards, including Standards for Attestation Engagements Number 18, section 205A.31, "Sampling."