The DoD has been trying to improve its financial accountability for years. One could easily point to the 1990 CFO Act as a significant milestone that recognized the need to improve the government’s financial management. Unfortunately, the Defense Department is the only federal executive agency that has not passed a financial statement audit since then.
But, the DoD is the first to admit that they have work to do. The Pentagon is making large strides toward this financial goal and have clearly made it a priority. Annual full financial statement audits are now a normal occurrence. And the frequency and the intensity of these audits continue to increase year over year.
What is notable in 2020, is that the pressure is starting to increase particularly for government contractors. Reasonably so, as estimates suggest that contractors are responsible for and manage a significant portion of the government’s property. A recent Baker Tilly article suggests that at least 11% of DoD assets administered by the DCMA reside in contractor possession.
Audit Preparation
Modern Defense contractors need to have business systems in place to help them achieve compliance to their financial accounting obligations. These financial accounting obligations are typically audited by DCAA.
Contractors that manage Government property also need to recognize that they are obligated to maintain a Government property management system. These physical asset obligations are typically audited by DCMA.
These two business systems are complex and interconnected with each other. And often the deficiencies in one system will cascade over into the other business system. We urge government contractors to arm themselves with a complete audit readiness plan that encompasses both DCAA and DCMA audit preparation.
Webinar: Preparing for DCAA and DCMA Audits
In this upcoming webinar learn how the combination of the Deltek Costpoint and A2B Tracking software solutions can provide a path to an Audit Readiness platform for defense contractors.
You will learn:
- Background on FIAR and why it’s important to any government contractor
- Reviewing the FAR, GAGAS and CAS regulations
- Why the IUID Policy, inventory accuracy and government property record keeping are so important
- The impact of today’s government systems such as PIEE, WAWF, GFP Module and PCARSS
- How the combination of Deltek Costpoint and A2B Tracking can help your organization be Audit Ready and compliant
Asset visibility and financial accountability have never been more important for government contractors. Achieving audit readiness needs to be incorporated into the inner workings of an organization and embraced by the entire corporation. Make sure that your organization is taking advantage of the available technology to remain competitive and be prepared.
Learn how the integration between A2B Tracking’s Government Property Management system and the Deltek Costpoint platform is an unbeatable combination for DCAA and DCMA Audit Readiness.
