Audits & Access to Records

CGS’ experience and expertise in contracting with a variety of government agencies enable us to carefully guide clients through the compliance requirements faced throughout the life-cycle of a contract.  One nuance of contracting with government agencies (i.e., federal, state and local), is the inclusion of audit and records access rights in government agreements.   This additional scrutiny requires a solid Compliance Program to aid in the effective performance of government contracts.

Federal Contracts – The Federal government uses a number of different agencies to evaluate information furnished by contractors, such as: the Government Accountability Office (GAO), the US Department of Health and Human Services (HHS) Inspector General, and most notably, the Defense Contract Audit Agency (DCAA) which audits contracts issued by the Department of Defense (DoD).  The DCAA is also sometimes used by other government agencies to perform similar audit services.  Federal contracts subject contractors to the Truthful Cost or Pricing Data (formerly the Truth in Negotiations Act or “TINA”) requirements for adequately disclosing and supporting financial data used in a contract proposal.  

Further, certain contracts allow the DCAA to perform audits of a contractor’s cost or pricing data both before and after awarding a federal contract.  Noncompliance with such provisions expose the contractor to fines, penalties and unfavorable contract price modifications.  Additionally, contractors must prepare incurred cost submissions on an annual basis (subject to DCAA audit and approval) to recover costs on flexibly-priced contracts.

State & Local Contracts – Similar to Federal awards, state and local contracts often carry audit rights to evaluate the adequacy and veracity of financial information.  For instance, contractors performing a State Department of Transportation (DOT) contract are required to comply with FAR Part 31 for the identification and exclusion of “unallowable costs” and to obtain an audit report from an independent CPA firm for its indirect cost rate (i.e., “overhead rate”) calculation.  Information provided by the contractor, as well as the audit report issued by the CPA firm, face compliance oversight from the DOTs.

CGS assists contractors in successfully navigating the audit and record access requirements with a practical emphasis on compliance and risk management programs and minimizing the disruption to the Company’s organization.  CGS provides the following solutions for its clients:

  • We assist clients in identifying and understanding the key clauses contained in contracts (e.g., sealed-bidding, examination or records, audit-negotiation, etc.) 
  • Similarly, we carefully guide contractors through the critical record retention requirements underpinning such clauses to ensure that costs incurred by a contractor are properly supported and, ultimately, reimbursed by the government. 
  • We also help contractors to develop, implement and monitor the necessary policies and procedures to achieve compliance with minimal disruption to day-to-day operations. 
  • Finally, we can assist with responding to and interacting with government auditors to achieve successful outcomes for our clients.

Please contact us to learn more about how we can assist you.