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Depending on the types of contracts you have, you can face a vast amount of audit oversight. It can translate into disallowed costs, penalties, fines, and loss of credibility with government customers. Understanding the regulatory government audit mindset and how to prepare for a broad range of audits will place you a step ahead in mitigating the risk of adverse audit problems.
 
To reduce and avoid audit problems, contractors must understand the audit objectives, techniques, specific areas of audit emphasis, and the options for analyzing and effectively responding to audit findings. Employing best practices in dealing with auditors on a regular basis and formulating an effective chain of communication during the course of various audits, will often achieve this objective. But, mitigating the risk of audit problems and successfully resolving audit problems also requires a thorough understanding of certain audits that most frequently raise adverse issues, as well as a contractor’s responsibilities and rights for effectively addressing questioned costs or challenges to internal controls that result from audits.  Government contractors must also be vigilant and diligent in understanding the sequence of steps and levels of government procurement authorities in resolving audit disputes. Understanding how to prepare for audits; the audit objectives and procedures employed by auditors; how to interact with auditors; and effective methods for deterring and addressing audit issues will mitigate the risk of cost disallowances, loss of contract opportunities, and an image of tainted credibility with the government.  
 
To meet the objectives of the course, we have assembled a distinguished, experienced Course Faculty. They are instructors who have an extensive background in understanding Government audits and in how to overcome potential audit problems. The professionals leading this course have experience both as DCAA auditors and as consultants to government contractors and have an understanding of both the audit perspective and the government contractor perspective. They work in a consulting profession where they are continuously assisting government contractors in understanding and resolving audit issues. 
  1. Preparing for audits and effectively interfacing with auditors before, during and upon conclusion of audits
  2. Understanding contractor and government rights within the audit process
  3. Dealing with specific types of audits and the more frequent issues within incurred cost proposals, bid proposals, billing rates, cost accounting systems, internal controls, defective pricing, costs, and Cost Accounting Standards, etc.
  4. Being prepared to address potential audit challenges of issues such as travel costs; professional and consulting fees, advertising and selling costs; intercompany transfers; access to records and to employees; DCAA billing cost suspensions, and; reasonableness and allocability
  5. Resolving audit disputes through pro-active interface with auditors, audit managers, contracting officers, and other Government authorities
  6. Evaluating audit challenges and preparing effective responses to audit issues
  7. DCAA audit standards, methods, tools, and procedures for conducting audits
  8. Understanding DCAA’s role of investigative support and in identifying and reporting suspected irregularities.
  9. Understanding oversight techniques and circumstances which elevate audit risk in order to mitigate risk of audit findings
  10. The procurement culture driving audit oversight, and DCAA/DCMA organizational structure, charter, and fundamental audit objectives
  11. Following current procurement trends and their impact on DCAA areas of emphasis, and how contractors should prepare for the audits
We look forward to your participation

Dates and Locations
August 13-14, 2014
Executive Conference & Training Center
Sterling, VA, United States
$1180.00

Course Schedule:

Day 1 & 2: 9 am – 4 pm

 

________________________________________________
Course Curriculum
 
  1. Government Audit Background Information
    1. Regulatory Environment
    2. Government Audit Philosophy
    3. Audit Oversight Charter
    4. Business Environment Elevating Level of Audit Oversight
    5. Overview of Agencies in Audit Oversight Process
  2. Defense Contract Audit Agency (DCAA)
    1. Purpose and Role in Procurement Process
    2. Organization and Structure
      1. Headquarters
      2. Regional Offices
      3. Field Offices
      4. CAC Networks (Contract Audit Coordination)
    3. Relationship with Procurement and Other Oversight Agencies
      1. Procurement Commands
      2. GAO  (Government Accountability Office)
      3. DCMA (Defense Contract Management Agency)
      4. DOD IG (Department of Defense Inspector General)
      5.  DOJ (Department of Justice)
      6. Investigative Agencies
    4. Authority and Responsibilities
      1. Audit Concepts and Principal Duties
      2. Audit Objectives
      3. Auditing Standards
    5. Relationship With Regulatory Agencies
      1. Cost Accounting Standards (CAS) Board
      2. Federal Acquisition Regulations (FAR) Council
      3. DPAP and SS (Defense Procurement Acquisition Policy and Strategic Sourcing)
    6. Internal Operations
      1. Headquarters
      2. Regional offices
      3. Resident and branch offices
      4. Professional staff
      5. Audit statistics
      6. Reports and surveys
    7. Audit Guidance and the DCAA Internet Website
      1. Contract audit manual (CAM)
      2. Open Audit Guidance & public access
      3. Directives and working papers
      4. Special or specific audit guidance
      5. External materials
  3. Dealing with Auditors and Improving Working Relationships
    1. General working relationships
      1. Recognizing audit goals and assignment challenges
      2. Contractor team assignments
      3. Anticipating and correcting problems
      4. Establishing communication process
      5. Responding to audit requests and final results
    2. Preparing for audit
      1. Notification of audit
      2. Anticipating audit procedures and data required
      3. Setting up interface channels
      4. Preparing for entrance conference
    3. Interface during audits
      1. Communication best practices
      2. Responding to audit requests for data and information
      3. Informal versus formal working arrangements
      4. Responding to audit report informally and formally
      5. Resolving problems during audit
      6. Exit meeting
    4. Avoiding audit disputes
      1. Understanding basis for findings
      2. Reviewing draft audit report
      3. Resolution through appropriate audit channels
      4. Involving senior audit management
      5. Analysis of data reviewed and procedures employed
      6. Presentation of additional facts
      7. Corrective action strategies
    5. Resolving unique audit issues and problems
      1. Adverse audit behavior
      2. Sufficiency of audit procedures & data reviewed
      3. Audit avoidance/ignoring of all relevant facts
      4. Materiality issues
  4. Cost accounting System Basics—Understanding Audit Focus
    1. Tracking costs by contract
    2. Direct and indirect cost identification
    3. Recording unallowable costs
    4. Timekeeping and labor distribution
    5. Subsidiary accounting functions
    6. Audits that focus on cost accounting regulations
  5. Specific Audits: Preparing for and Responding to Audit Issues
    1. General concepts covered for each audit
      1. Understanding specific audit procedures & objectives
      2. Mitigating risk through preparation and knowledge
      3. Minimizing audit disputes
      4. Evaluating and challenging audit issues & positions
      5. Specific response methods to audit deficiencies
      6. Contractor rights in audit process and responding
      7. Impact of current audit trends & procurement events
    2. Specific audits
      1. Pre-award or Post-award Accounting System Reviews
      2. Forward Pricing Bid Proposals
      3. Provisional Billing Rates
      4. Internal Controls (Audit “ICAPS” Program)
        1. Overall accounting control environment and business ethics
        2. Billing system
        3. Estimating system
        4. Compensation system
        5. Purchasing system
        6. Impact of current audit trends on DCAA procedures
      5. Cost Accounting Standards
        1. General compliance
        2. Disclosure Statements
        3. Cost impact statements
      6. Incurred Costs
        1. Proposal presentation and timely submission problems
        2. Audit basis for questioned costs
        3. Materiality
        4. Penalties on unallowable costs
      7. Defective Pricing
  1. Unique Cost and Other Audit Issues--Current Audit Initiatives
    1. Labor costs
      1. Timekeeping issues
      2. Uncompensated overtime considerations
      3. Purchased or contracted labor & allocations
    2. Accounting for unallowable costs
      1. Myopic audit views
      2. Directly associated unallowable costs
      3. Statistical sampling techniques
      4. Audit positions on calculating penalties
    3. Allocability
      1. Audit judgment in viewing allocability
      2. Allocation bases for indirect expenses
      3. Concepts of “benefits” entire organization
    4. Reasonableness concepts
      1. Audit perspective
      2. Recognizing judgment factors
      3. Responding to “reasonableness” challenges
      4. Incurred costs most subject to audit reasonableness challenges
    5. Contractor documentation and access to records
      1. Case law governing certain data
      2. Government & contractor rights
      3. Regulations requiring written policies and procedures
    6. Professional and consulting fees
    7. Public relations, advertising, and marketing costs
    8. Business meetings and conference expenses
    9. Travel costs
    10. Compensation Cost Reasonableness and Statutory Limits
    11. Intercompany transfers
    12. DCAA Form 1 Cost Suspension or Disallowance
    13. Estoppel rule
    14. Credits and refunds
  2. Effects of Current Procurement and Audit Events
    1. FAR Part 3 rule changes—business ethics, internal controls, and disclosure
    2. GAO July 2008 audit report on DCAA
    3. DOD rule on pass-through costs on subcontracts
    4. New rule on Time & Material/Labor hour contracts
    5. Significant DCAA guidance and trends

Michael E. Steen is a Director with Redstone Government Consulting, Inc. and a specialist in complex compliance issues to include major contractor cost accounting & business system regulations, financial compliance, resolution of DCAA audit issues, Cost Accounting Standards application, litigation support, and claims preparation. Prior to joining Redstone Government Consulting, Mike served in a number of capacities with DCAA for over thirty years, and upon his retirement, he was one of the top seven senior executives with DCAA. Mike Served as a Regional Director for two DCAA regions, and during that time was responsible for audits of approximately $25B and 800 employees.

Mike was also involved in conducting or managing a variety of compliance audits, to include cost proposals, internal controls and related systems, Cost Accounting Standards, claims, defective pricing, and special programs. He was also actively involved in contract disputes and litigation, and has prepared and presented various lectures and seminars to DCAA staff and business community leaders. Mike also served as a member of the Executive Steering Committee for DCAA during his tenure as a Regional Director.


Mike has a BS Degree in Business Administration from Wichita State University. He is also a graduate of the DCAA Director's Fellowship Program in Management, and has a Masters Degree in Administration from Central Michigan University. Mr. Steen also completed a number of OPM’s management and executive development courses.


Darryl Walker,
CPA, 
is a Director for Government Compliance with Redstone Government Consulting, Inc., and formerly served as an Owner and Technical Director for the Beason & Nalley Government contract consulting group for over ten years. He provides content for our Government Insights Newsletter, provides training courses to government contractor and business community leaders, and consults with government contractors regarding a vast range of issues including cost proposals and presentations, internal controls, proposal preparation, compliance with the FAR and Cost Accounting Standards, litigation support, specialized claims, defective pricing issues, liaison with procurement and DCAA audit officials, and accounting and management systems compliance. 


Prior to joining Redstone Government Consulting, Darryl worked with the Defense Contract Audit Agency (DCAA) for almost 34 years in a variety of technical and management capacities. During his tenure with DCAA, Darryl provided audit services to a wide range of government agencies, including the Department of Defense, NASA, Department of Energy, Department of Interior, General Services Administration, and Department of Justice. During his experience with DCAA, Darryl audited over 3,000 government contractors throughout the Southeastern United States, Europe, and the Middle East. 


Darryl is a graduate of Texas Wesleyan College with a major in accounting and minor in economics.

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Executive Conference & Training Center
22685 Holiday Park Drive
Suite 500
Sterling, VA, United States 20166
TRAVEL INFORMATION
 Guest rooms are available at the Hampton Inn and Suites Dulles (22700 Holiday Park Drive), located across the street from the meeting venue.  Please call the hotel at 703-537-7800 and specify that you are part of "Federal Publications" to receive the special group rate of $129/night.  Rooms are limited and subject to availability, so please book early.  Reservations must be made three weeks prior to the meeting start date.
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Government Contract Audits: Dealing with Auditors and Mitigating Audit Risk
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August 13-14, 2014 Sterling, VA, United States
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