It appears that government audits are on the rise, especially coming from DCAA. An auditor indicated that the increased audit activity would pretty much be the new norm, given what appeared to be lower audit activity over the past five-plus years. The audits are more comprehensive in nature and reviewing amounts billed, drilled down the properly coded and approved source documents.
In addition, auditors are reviewing your policies and procedures, internal controls, and compliance with the accounting system approved by the government. While an audit is a good indicator of your company’s ability to utilize best practices, as well as comply with your federal award, adverse audit findings can lead to complications with your ability to have vouchers approved, not to mention exposure in other areas.