1 Department of Defense INSTRUCTION . NUMBER April 15, 2015. IG DoD. SUBJECT: Policy for Follow-Up on Contract Audit Reports References: See Enclosure 1. 1. PURPOSE. This INSTRUCTION reissues DoD INSTRUCTION (DoDI) (Reference (a)) in accordance with the authority in DoD Directive (DoDD) (Reference (b)) to: a. Establish policy, assign responsibilities, and provide direction for reporting requirements and follow-up procedures on contract audit reports issued by the Defense Contract Audit Agency (DCAA). b. Implement the Inspector General Act of 1978, as amended, Title 5, United States Code, Appendix, and the Office of Management and Budget Circular No.
2 A-50 (References (c). and (d)). 2. APPLICABILITY. This INSTRUCTION : a. Applies to OSD, the Military Departments, the Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense (IG DoD), the Defense Agencies, the DoD Field Activities, and all other organizational entities within the DoD (referred to collectively in this INSTRUCTION as the DoD. Components ). b. Does not apply to reports of the Government Accountability Office, the IG DoD, and other DoD internal audit organizations.
3 Follow-up policies and procedures for reports of those organizations are contained in DoDI (Reference (e)). 3. POLICY. It is DoD policy that: a. Audit follow-up is an integral part of evaluating and monitoring the actions taken in response to contract audits reports and is a shared responsibility of DoD Component officials and auditors. DoDI , April 15, 2015. b. Findings and recommendations contained in contract audit reports must be resolved and dispositioned in a timely manner, consistent with regulations and DoD policy. c. DoD Components comply with the requirements of Reference (d) by establishing systems to assure the prompt and proper resolution and implementation of audit recommendations.
4 These systems must provide for a complete record of action taken to resolve and dispose of audit report findings and recommendations. 4. RESPONSIBILITIES. See Enclosure 2. 5. PROCEDURES. See Enclosure 3. 6. INFORMATION COLLECTION REQUIREMENTS. Contract audit reports, referred to in this INSTRUCTION , do not require licensing with a report control symbol in accordance with paragraph 1b(7) of Volume 1 of DoD Manual (Reference (f)). 7. RELEASABILITY. Cleared for public release. This INSTRUCTION is available on the Internet from the DoD Issuances Website at 8.
5 EFFECTIVE DATE. This INSTRUCTION is effective April 15, 2015. Enclosures 1. References 2. Responsibilities 3. Procedures 4. Follow-Up Status Reports Glossary 2. DoDI , April 15, 2015. TABLE OF CONTENTS. ENCLOSURE 1: REFERENCES ..4. ENCLOSURE 2: RESPONSIBILITIES ..5. IG DOD ..5. DIRECTOR, DCAA ..5. DoD COMPONENT ENCLOSURE 3: PROCEDURES ..7. TRACKING AND REPORTING REQUIREMENTS ..7. Tracking Requirements ..7. Reporting Requirements for Reportable Contract Audit Reports ..7. RESOLUTION OF REPORTABLE CONTRACT AUDIT REPORTS ..9. DISPOSITION OF REPORTABLE CONTRACT AUDIT REPORTS.
6 9. ENCLOSURE 4: FOLLOW-UP STATUS REPORTS ..11. GENERAL ..11. OPEN AUDIT REPORTS ..11. CLOSED AUDIT REPORTS ..12. CODES FOR TYPE OF AUDIT ..13. GLOSSARY ..15. PART I: ABBREVIATIONS AND ACRONYMS ..15. PART II: TABLE. Audit Codes ..14. 3 CONTENTS. DoDI , April 15, 2015. ENCLOSURE 1. REFERENCES. (a) DoD INSTRUCTION , Policy for Follow-up on Contract Audit Reports, August 22, 2008 (hereby cancelled). (b) DoD Directive , Inspector General of the Department of Defense (IG DoD), . April 20, 2012, as amended (c) Inspector General Act of 1978, as amended, Title 5, United States Code, Appendix (d) Office of Management and Budget Circular No.
7 A-50 (Revised), Audit Follow-up, September 29, 1982. (e) DoD INSTRUCTION , Follow-up on General Accounting Office (GAO), Inspector General of the Department of Defense (IG DoD), and Internal Audit Reports, . December 18, 2014. (f) DoD Manual , Volume 1, DoD Information Collections: Procedures for DoD. Internal Information Collections, June 30, 2014. (g) DoD INSTRUCTION , Audit Policies, October 16, 2014. (h) Federal Acquisition Regulation, current edition (i) Title 10, United States Code 4 ENCLOSURE 1. DoDI , April 15, 2015. ENCLOSURE 2.
8 RESPONSIBILITIES. 1. IG DoD. The IG DoD: a. Establishes policy and procedures for contract audit follow-up and provides guidance to the DoD Components. b. Monitors, coordinates, and evaluates the contract follow-up system and execution of DoD. Component responsibilities assigned in section 3 of this enclosure. c. Identifies where contract audit follow-up procedures can be improved and recommends appropriate corrective action to the DoD Component heads. d. Provides reports on the status of DoD contract audit follow-up efforts for the semiannual reporting periods ending March 31 and September 30 of each year, including those required by References (b) and (c), to the Secretary of Defense and Congress.
9 2. DIRECTOR, DCAA. Under the authority, direction, and control of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, Department of Defense , the Director, DCAA: a. Issues timely audit reports and provides timely and complete responses to contracting officers or review officials who request clarification or information supporting the reported findings and recommendations. b. Issues timely supplemental audit reports to update findings or recommendations. Does not use other communication methods (such as memorandums or e-mails) to update the findings or recommendations when the updates have a significant impact on government contract costs.
10 C. Provides timely and adequate support to the IG DoD and any other DoD organization reviewing a DoD Component's contract audit follow-up program in accordance with DoDI. (Reference (g)). d. Considers all feedback provided by contracting officials to analyze and improve audit procedures and practices. e. Provides a monthly listing of reportable contract audit reports to the DoD Components'. contract audit follow-up management official. Includes the information listed in Enclosure 4 of this INSTRUCTION for each contract audit report . 3.