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Potential Impact of DCAA Internal Issues on the Small Government Contractor

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Prior to her reassignment from Director of the Defense Contract Audit Agency to “an executive position” on the Defense Department Comptroller Robert Hale’s staff, April Stephenson implemented a number of improvements to address issues cited in recent GAO reports of DCAA shortcomings. 

These included:

  • Halting practices that based employee performance evaluations on the number of audits produced and the time they were produced in and,
  • Discontinuing the agency’s practice of allowing contractors to continue using flawed accounting systems.  This particular focus, now part of DCAA policy, has a direct impact on all firms doing business with the government.  A firm cannot underestimate the importance of establishing and maintaining an Adequate Accounting and Supporting Systems.

Stephenson’s 21-month tenure as DCAA director has been dominated by the fallout from two Government Accountability Office reports that found auditors cut corners, changed audit findings to be favorable to contractors without good cause, and rushed audits to completion to meet cost and management pressures.

Now I ask you. What do think will happen to address these charges?  That’s right! Increased efforts will be made by the DCAA to “not appear favorable to contractors”.

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