Department of Defense Procedures to Determine Contractor Compliance with Cost Accounting Standards

PSAD-77-125: Published: Jun 8, 1977. Publicly Released: Jun 8, 1977.

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A limited evaluation of the adequacy of Department of Defense procedures to determine contractor compliance with cost accounting standards and regulations disclosed numerous instances of contractor noncompliance.

The evaluation was directed toward the work of the Defense Contract Audit Agency, which has basic responsibility for ensuring contractor compliance. In addition to numerous identified instances of noncompliance, some have gone undetected because the Agency does not have adequate controls to ensure that all significant provisions of the standards have been included in the reviews of contractor compliance. The Agency is considering a "control schedule for compliance reviews" which would identify cost accounting standard provisions significant to a particular contractor based on potential for impact on contract costs, and which would significantly improve the planning of compliance reviews.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Agency should proceed with the further development and implementation of the controls needed to assure that sufficient audit coverage is given to contractor compliance with cost accounting standards, rules, and regulations.

    Agency Affected:


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