NCJ Number
65951
Date Published
1979
Length
5 pages
Annotation
THE DIRECTOR OF THE DEFENSE CONTRACT AUDIT AGENCY (DCAA) DISCUSSES THE IMPLEMENTATION OF COST ACCOUNTING STANDARDS (CAS) AND PROBLEMS THE AGENCY HAS WITH CONTRACTORS.
Abstract
THE CONTRACT AUDITOR FROM DCAA ADVISES THE ADMINISTRATION IF A CONTRACTOR'S DISCLOSURE STATEMENT, PRACTICES, AND PRICE ADJUSTMENTS COMPLY WITH COST ACCOUNTING PRINCIPLES AND CAS. ALTHOUGH CONTRACTORS CLAIM THAT COMPLIANCE WITH CAS HAS IMPOSED INTOLERABLE ADMINISTRATIVE BURDENS, THE DCAA HAS FOUND THAT CAS MAKE CONTRACTORS MORE ACCOUNTABLE AND HAVE NOT SIGNIFICANTLY INCREASED COSTS. BECAUSE OF THE DELAYS INVOLVED IN SETTLING DISPUTES BY THE ARMED FORCES BOARD OF CONTRACT APPEALS AND THE TECHNICAL NATURE OF CAS CASES, A SPECIAL ACCOUNTING COURT WOULD BE AN EXPEDITIOUS COURT OF APPEAL. THE CAS BOARD AND OTHER GROUPS WITHIN THE DEFENSE DEPARTMENT ARE DEVELOPING AND ISSUING GUIDELINES ON CAS IMPLEMENTATION. THE GENERAL SERVICES ADMINISTRATION HAS ESTABLISHED CAS GUIDELINES FOR CIVILIAN AGENCIES, AND AN INTERAGENCY COMMITTEE HAS BEEN CREATED TO ENCOURAGE CONSISTENCY IN THE IMPLEMENTATION OF CAS. HOWEVER, A SINGLE GOVERNMENTWIDE COUNCIL RESPONSIBLE FOR ALL ASPECTS OF CAS WOULD BE MORE EFFECTIVE THAN THIS FRAGMENTED APPROACH. THE DCAA HAS ENCOUNTERED PROBLEMS IN GETTING CONTRACTORS TO PROVIDE DETAILED INFORMATION ON THEIR COST ACCOUNTING PRACTICES AND KEEPING DISCLOSURE STATEMENTS CURRENT; CONTRACTORS DO NOT WANT TO BE HELD RESPONSIBLE FOR DETERMINING THEIR SUBCONTRACTORS' COMPLIANCE WITH CAS. THE DCAA HAS INITIATED A MAJOR TRAINING PROGRAM TO FAMILIARIZE ITS AUDITORS WITH THE COMPLEXITIES OF CAS. WHEN A COMPLETE SET OF COST MEASUREMENT STANDARDS HAS BEEN PROMULGATED, NO CONTRACTORS SHOULD BE EXEMPT FROM CAS WITH THE POSSIBLE EXECEPTION OF FOREIGN FIRMS. (MJM)