New Fraud Guidelines at DCAA


The Defense Contract Audit Agency  has issued new guidelines for reporting fraud found during contract audits.

In this Feb. 9 memo first reported by the Center for Public Integrity, DCAA’s assistant director for operations, Karen Cash, said if an auditor finds potential fraud– such as repeated over billing, false labor charges, improper transfers or bribes—the auditor can refer those cases to the Defense Criminal Investigative Service, even if the auditor cannot prove those questioned costs are fraudulent.

“There is no requirement for the auditor to prove the existence of fraud or other contractor irregularities” before referring suspected cases to the Defense investigators, Cash wrote. “The auditor is merely reporting the suspicion of irregularities to the appropriate investigative agencies.”

The memo urges mangers to support auditors in their reporting of suspected fraud.

According to the Center for Public Integrity report, a DCAA manager denied a request by one of his auditors to report suspected fraud to criminal investigators because the auditor didn’t have adequate proof. That incident happened last January, prior to a July Government Accountability Office report that showed DCAA auditors and managers were not adhering to government auditing standards.


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