Mock Audits

Approval of Accounting System
Evaluate the compliance, internal controls, and good business judgment of the accounting function. The most important link in the Accounting System is the completeness and accuracy of records created outside of the Accounting Department. Timesheets, Purchase Orders, and other source documents – mostly approved outside of the Accounting Department – trigger recording of transactions that comprise the General Ledger. Written policies and procedures, signed by the responsible manager over each respective function, are compared to laws, contract terms, and actual practices. The pre-audit includes evaluation of internal controls, such as segregation of incompatible duties; ease of determining Actual Incurred Costs for each separate project, allowing month-to-month and budget-to-actual comparisons; and assessment of indirect rates, for treatment of unallowable costs and for reasonableness of the causal or beneficial relationship between each pool and its base. Subsequent staff training, tailored to review results, is typically added.

Contractor Procurement System Review (CPSR)
Evaluate the compliance, internal controls, and good business judgment of the purchasing function. Procurement encompasses small-dollar Maintenance, Repairs, and Operations through major subcontracts. Adequate documentation for Source Justification and Price Justification, each a separate requirement, are critical to the review. Other review points include a vendor signature on each award document; indicators of splitting a large purchase into multiple, smaller purchases (in order to avoid requirements for high-dollar awards); plus ambiguous terms and conditions (or missing flow-down clauses that are required). Subsequent staff training, tailored to review results, may be added.

Materials Management and Accounting System (MMAS)
Evaluate the compliance, internal controls, and good business judgment of the operational links between the two systems or functions. Materials management encompasses creation of Bills of Materials, scheduling, material transfers/write-offs, count tolerances, and vendor problems. Accounting for materials, especially methodologies used, is also analyzed. Subsequent staff training, tailored to review results, may be added.

Defective Pricing / Post-award Review / Truth in Negotiations Act (TINA)
Assess the validity of the Truth In Negotiations (TINA) certification signed at the conclusion of negotiations. The certification claims that all information, which might impact negotiations, was presented - not merely made available - to the USG. For a TINA non-compliance, the USG need only show that management should have known (not, had actual knowledge) of the non-compliance. Generally, certification is only required for negotiated, Fixed Price awards. Each negotiation stands on its own; a competitive and/or flexibly priced award might have a negotiated, Fixed Price modification. A mock audit of TINA awards explores knowledge throughout the company on the date of certification. This includes issued Purchase Orders, historical costs, and contracts with fringe benefit administrators. The certifier and management minimize unhappy surprises with performance of a mock audit, followed by staff training tailored to findings.

Preparation for Other DCAA Audits
Prepare a contractor, subcontractor, or grantee for scheduled and/or potential reviews to minimize surprises. From audit of a function or a cost proposal, the foreknowledge offered by a mock review brings peace of mind. In addition, customer recommendations can be eliminated by implementing corrective action before the customer review/audit. Findings can be reduced through training, which also demonstrates steps to correct systemic findings.