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We know that you have been waiting for it: The Annual DCAA Report to Congress for FY 2012, dated March 29, 2013, has been posted to the DCAA website! This is the first in a series of articles on the report to congress, and we will start with some agency performance metrics:
Agency Metrics
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FY 2011
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FY 2012
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Audits Completed
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7,000
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6,700
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Costs Audited (billions)
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$128.0
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$154.0
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Costs Questioned (billions)
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$11.9
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$12.4
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Costs Questioned / Costs Audited (billions)
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9%
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8%
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Questioned Costs Sustained (billions)
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$3.5
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$3.5
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Sustention Rate
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29%
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28%
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DCAA Return on Investment
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$5.80
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$6.70
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 Productivity per Auditor:
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DCAA Audit Staff
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4,876
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5,181
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Audits Completed
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1.44
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1.29
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Costs Audited (millions)
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$26.3
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$29.7
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Costs Questioned (millions)
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$ 2.4
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$2.4
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These agency metrics reflect some conditions we expected and some conditions we did not.
We expected:
DCAA has implemented a policy to perform multi-year audits, and the higher costs audited metric seems to reflect that policy.
DCAA has hired more auditors, which would lead to a decrease in productivity due to the inexperience of the new staff, and there are more auditors and fewer audits per auditor.
We did not expect:
DCAA has increased costs audited and maintained costs questioned, even with new, inexperienced auditors. Since sustention rates tend to lag audit performance, we are anxious to see next year’s questioned costs sustained rate.
DCAA’s questioned cost sustained rate remains low. Given the means that DCAA has to compel contracting officers to agree with audit recommendations, we would expect that number to be higher and litigation to be more frequent.
The most unexpected metric is DCAA’s return on investment. DCAA has maintained consistent questioned costs and questioned cost sustained, but increased its staff (DCAA’s primary cost driver) and dramatically increased its return on investment. How did DCAA manage to reduce costs per auditor in an already frugal agency? How will this impact auditor turn-over and resulting audit quality?
Our crystal ball is a little cloudy when consulted on these issues, but metrics are clear about DCAA’s progress in clearing its backlog of incurred cost audits. Read about it in our next article in this series on The Second Annual DCAA Report to Congress.
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