CASB--Thresholds

AFMD-93-68R: Published: May 10, 1993. Publicly Released: May 10, 1993.

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GAO reviewed the Cost Accounting Standards Board's (CASB) proposed rulemaking amending the dollar thresholds for cost accounting standards. GAO noted that: (1) increasing the full coverage threshold from $10 million to $25 million is reasonable, since inflation has increased by 250 percent and the contract dollar amount subject to full coverage would decrease only 5 to 6 percent; (2) eliminating the requirement that contractors be subject to full coverage when 10 percent or more of their total annual sales are from federal contracts simplifies the full coverage criteria and eliminates possible discrimination against smaller firms subject to full coverage; (3) adding two CASB statements as required standards under modified coverage will promote uniformity and reduce the government's risk of paying unallowable costs; and (4) increasing the minimum threshold for subsequently covered contracts from $100,001 to $500,001 for modified coverage and $100,001 to $1 million for full coverage is consistent with the minimum amount of initially covered contracts subject to CASB standards.

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