One quick note about the contractor is described in the previous article, how I described their critical technology, and the way this often impacts the compliance process and audits.
Too many contractors believe that the importance of their work should provide them with a free pass on accountability. I join with DCAA auditors and taxpayers in rejecting this positon.
DCAA auditors are required to walk a fine line between protecting taxpayers’ assets (money) and assuring that the service members DCAA are supporting get the resources they require. Often, the auditors have no knowledge of the contractor’s work and its importance.
In my book, Accounting Policies and Procedures: For Small Government Contractors Working with the DCAA and Other Government Agencies I encourage contractors to begin their accounting manual with a description of the company and the work they do:
“The manual should start with a little background information on your company as an introduction for the DCAA auditors. You would be surprised how hungry auditors are for this information, and how critical it is in their assessment of your operations. Rightly so, the DCAA auditors are an essential aspect of our nation’s defense and it is only natural they wish to make some attachments to your efforts in our nation’s defense. “
It does not appear that any such knowledge made any impact on this case, but I believe the concept is valid.