Report | April 18, 2013

Quality Control Review of the Defense Contract Management Agency Internal Review Audit Function

DODIG-2013-065

Background

Defense Contract Management Agency

The Defense Contract Management Agency (DCMA) is the DoD component that works directly with Defense suppliers to help ensure that DoD, Federal, and allied government supplies and services are delivered on time, at projected cost, and meet all performance requirements. As of September 30, 2012, DCMA employed 10,478 civilian and 538 military personnel, included 3 operations directorates and 46 contract management offices, and oversaw 20,296 contractors with 344,000 active contracts.

DCMA Internal Review Team

The DCMA Internal Review Team (IRT) is part of the DCMA Office of Independent Assessment. The Office reports directly to the Director of DCMA. The DCMA IRT has two primary mission components:

  • conduct internal reviews (auditing) of administrative support programs, systems, and processes to include determining the adequacy of existing management controls, forming appropriate conclusions, and making applicable recommendations to the Director of DCMA and
  • perform external audit liaison, coordination, and audit advisory services.

The Office consists of a supervisory auditor, one external liaison administrator, and six auditors. The DCMA IRT began performance auditing in FY 2009. The DCMA IRT published its first Audit Manual on April 30, 2010, and revised the Audit Manual on January 6, 20121.

Comments and Observations

We are issuing a pass opinion because we determined that the system of quality control for the DCMA IRT is adequately designed and functioning as prescribed. The findings we identified during our review of the selected audit reports were not cumulatively significant enough to rise to the level of a deficiency or significant deficiency, based on our opinion and as defined by the Council of the Inspectors General on Integrity and Efficiency (CIGIE) Guide for Conducting External Peer Reviews of the Audit Organizations of Federal Offices of Inspector General (CIGIE Guide).

We judgmentally selected two reports to review for compliance with generally accepted government auditing standards (GAGAS) in nine areas: quality control, independence, professional judgment, competence, audit planning, supervision, evidence, audit documentation, and reporting. In addition, we selected one audit in which DCMA performed monitoring of an independent public accounting firm for compliance with the CIGIE Guide.

We identified five areas with findings relating to the quality control system, independence, planning, audit documentation, and quality control of audits. In addition, we made recommendations in relation to the monitoring of independent public accountants (Appendix B). The review of the monitoring of the Independent Public Accountants (IPA) does not affect the opinion of the DCMA IRT quality control review.

__________

1 Due to the timeframe of this review, we applied the DCMA Audit Manual, April 30, 2010, for reviews of audits.