On March 21, 2019, the Department of Defense issued a Class Deviation regarding Accounting Firms Used to Support DoD Audits. The deviation, effective immediately, implements Section 1006 of the FY 2019 NDAA, which requires accounting firms providing financial statement auditing or audit remediation services in support of the audits required under 31 U.S.C. § 3521 to provide DoD a statement detailing any disciplinary proceedings against the firm or associated persons before an entity having “the authority to enforce compliance with rules or law applying to audit services offered by accounting firms.” This deviation is one of the latest developments in DCAA’s independent private auditor (IPA) initiative, which is aimed at reducing DCAA’s audit backlog and increasing the numbers of defective pricing and forward pricing audits. Indeed, per the 2018 NDAA, DCAA recently awarded 26 task orders to four firms. The contractors subject to these audits had a fiscal year ending in August and have already received audit notices from the IPAs. The next round of task order awards are expected in June and will target contracts held by contractors with a fiscal year ending December 31.

Originally published at Crowell & Moring

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