MRD 08-PAS-028(R) - Audit Guidance on In-Process Integrated Product Teams (IPTs) Assignments and Other

Defense Contract Audit Agency

Informations

• Publié par: Sojiz
• Nombre de lectures: 32
• Langue: English

Extrait

DEFENSE CONTRACT AUDIT AGENCY

DEPARTMENT OF DEFENSE

8725 JOHN J. KINGMAN ROAD, SUITE 2135
FORT BELVOIR, VA 22060-6219
IN REPLY REFER TO
PAS 730.3.B.2.4 September 12, 2008
08-PAS-028(R)
MEMORANDUM FOR REGIONAL DIRECTORS, DCAA

DIRECTOR, FIELD DETACHMENT, DCAA

HEADS OF PRINCIPAL STAFF ELEMENTS

SUBJECT: Audit Guidance on In-Process Integrated Product Teams (IPTs) Assignments and
Other Teaming Arrangements Involving the Contractor
Summary
Audit reports related to cases where DCAA auditors participated in Integrated Product
Teams (IPTs) or similar teaming arrangements involving the contractor that were in process on
August 5, 2008 should be qualified for the impact of DCAA’s participation on auditor
independence. MRD 08-PAS-024(R), Audit Guidance Discontinuing DCAA Participation in
Integrated Product Teams (IPTs), was issued on August 5, 2008, discontinuing DCAA’s
participation in IPTs and other teaming arrangements. In cases where the regional/FAO
assessment of the IPT assignment indicated that no IPT type effort was performed as of
August 5, 2008, the assignment should be cancelled.
Documentation related to the report qualification must be prepared for those in-process
IPT assignments (activity code 22000) and any other IPT type assignments (other activity codes).
The documentation should include a description of the nature and extent of the auditor’s
participation in the IPT or teaming arrangement, including any feedback provided to the
contractor and review of any draft contractor submissions. When the assignment is cancelled,
the auditors must document the number of hours charged to the assignment, why the assignment
was cancelled, and a description of the nature and extent of the effort performed.
The assignments to which this guidance applies have been identified by the regional
offices that were in-process on August 5, 2008. The guidance should not be applied to other
assignments without first coordinating with the region, which should coordinate with
Headquarters, Auditing Standards Division.
Guidance
Audit Report Qualifications and Related Matters
Audit reports related to contracting officers’ IPTs or similar teaming arrangements
involving the contractor that were in process when DCAA discontinued IPT participation should PAS 730.3.B.2.4 September 12, 2008
08-PAS-028(R)
SUBJECT: Audit Guidance on In-Process Integrated Product Teams (IPTs) Assignments and
Other Teaming Arrangements Involving the Contractor
be qualified for the impact of DCAA’s participation on auditor independence. Example
qualification language is provided in Enclosure 1. This includes audits that were in process
when the FAO discontinued its participation in the IPT and related audits of proposals the FAO
subsequently receives. For example, if the FAO was auditing a part of a proposal from an IPT
when DCAA discontinued IPT participation, the FAO should qualify the audit report on that part
of the proposal. If the FAO subsequently receives for audit another part of the proposal or the
final consolidated proposal from the IPT in which it had previously participated, the FAO should
also qualify the audit report on that proposal. Audits of these subsequently received proposals
should be performed under the appropriate activity code based on the level of service provided
(e.g., 21000, 27000). The FAO should ensure that the proposal is management approved and
that a request for audit from the contracting officer has been received.
Activity code 22000 or similar assignments involving teaming with the contractor where
no IPT type effort was performed as of August 5, 2008 (i.e., no feedback related to the proposal
was provided to the contractor) should be cancelled.
Documentation Supporting Disposition of Assignments
Documentation related to the report qualification must be prepared for in-process code
22000 assignments and similar assignments. The documentation should be included as a
separate working paper in section A and include a description of the nature and extent of the
auditor’s participation in the IPT or teaming arrangement, including any feedback provided to
the contractor and review of any draft contractor submissions. For assignments that are
cancelled, the auditor should prepare a Memorandum for Record (MFR) with appropriate
supporting documentation. The MFR should document the number of hours charged to the
assignment, why the assignment was cancelled, and the nature and extent of the effort
performed. The description must be in sufficient detail to clearly demonstrate that feedback was
not provided to the contractor on the proposal, other contractor submission or subject matter of
audit. Example language is provided in Enclosure 2.
Incurred Cost Audits and Audits of Contractor Systems
Some FAOs included incurred cost audits and audits of contractor systems when
identifying the in-process IPT and teaming arrangement assignments. These assignments
generally did not involve IPT type effort. Therefore, the report qualification and documentation
called for in this guidance are not required for those types of in-process assignments when all
questioned cost and/or deficiencies identified during the audit are reported. For example:
• If the contractor submits revised schedules or a revised certified incurred cost submission
to adjust for unallowable cost identified during the course of the incurred cost audit, the
audit report should reflect the results of the audit of the initial certified submission. The
contractor’s revised schedules/submission should be considered the contractor’s
concurrence to the questioned cost.
2
PAS 730.3.B.2.4 September 12, 2008
08-PAS-028(R)
SUBJECT: Audit Guidance on In-Process Integrated Product Teams (IPTs) Assignments and
Other Teaming Arrangements Involving the Contractor
• If the contractor corrects significant deficiencies/material weaknesses identified during the
audit of the contractor’s system and the design and implementation of the changes are
tested and found to be adequate, the system should be reported as adequate. However, all
deficiencies identified during the audit should be included in the report, including those that
were corrected and tested.
If an FAO believes that the circumstances of an in-process incurred cost audit or audit of
a contractor system are such that a report qualification for auditor independence is warranted, the
FAO should coordinate with the regional office, which should coordinate with Headquarters,
Auditing Standards Division, before applying this guidance.
We will be issuing additional guidance on incurred cost audits (including concurrent
auditing) and audits of contractor systems (e.g., Code 17740) in the near future.
Other Matters
All audit reports issued and memorandums documenting cancellation of the assignment
related to IPTs or similar teaming arrangements that were in process on August 5, 2008 should
be reviewed by Regional Audit Manager.
With the approach of the end of the Government’s Fiscal Year, FAOs are reminded that
audit quality must not be jeopardized merely to issue the audit report by the end of the Fiscal
Year.
FAO personnel should direct questions to their regional POCs, and regional personnel
should direct any questions to Auditing Standards Division, at [phone] or e-mail:
[e-mail].
/Signed/
Kenneth J. Saccoccia
Assistant Director
Policy and Plans
Enclosures: 2
1. Example Audit Report Qualification Language
2. ple Language for Documentation to Support Disposition of Assignment
DISTRIBUTION: C
3
Example Audit Report Qualification Language
1. Contracting Officer IPT. Use the following audit report qualification, tailored if necessary,
when the auditor participated in an IPT at the request of the contracting officer.
The audit results are qualified to the extent that DCAA’s participation in
the contracting officer’s Integrated Product Team (IPT) may have resulted in
impairment or the appearance of impairment to auditor independence. At
the request of the contracting officer, DCAA initially participated as a
member of the IPT. However, we discontinued our participation due to
concerns that auditor participation in IPTs may impair or give the
appearance of impairment to auditor independence.
2. Other Assignments, Including Teaming Arrangements. Use the following audit report
qualification, tailored to fit the circumstances for teaming arrangements with the contractor or
similar assignments.
The audit results are qualified to the extent that [DCAA’s participation in
a teaming arrangement with the contractor OR feedback provided by DCAA
to the contractor during this audit] may have resulted in impairment or the
appearance of impairment to auditor independence.
Enclosure 1 Example Language for Documentation to Support Disposition of Assignment
1. Qualified Reports. Use the applicable language below, tailored if necessary, to document the
file when a qualified audit report is issued.
Auditor participated in an IPT at request of the contracting officer
At the request of the contracting officer, we initially participated as a
member of the contracting officer’s Integrated Product Team (IPT) related to