Audit of Adequacy and Compliance of Disclosure Statement Revision 13, Dated April 2, 2003; Effective January 1, 2003
Reference Number: 2003-1C-144
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.
July 2, 2003
MEMORANDUM FOR DAVID A. GRANT
DIRECTOR OF PROCUREMENT
INTERNAL REVENUE SERVICE
FROM: Daniel R. Devlin /s/ Daniel R. Devlin
Assistant Inspector General for Audit (Headquarters Operations and
Exempt Organizations Programs)
SUBJECT: Audit of Adequacy and Compliance of Disclosure Statement Revision 13, Dated April 2, 2003; Effective January 1, 2003 (Audit #200310002.035)
The Defense Contract Audit Agency (DCAA) examined the contractor’s revised disclosure statement, Revision 13, dated April 2, 2003. The purpose of the examination was to determine whether the contractor’s revised disclosure statement dated April 2, 2003, adequately described the cost accounting practices that the contractor proposes to use in performing Government contracts and whether the revised practices comply with applicable Cost Accounting Standards and Federal Acquisition Regulation (FAR) Part 31. The DCAA also evaluated the contractor’s consistency of revised cost accounting practices with actual practices.
The DCAA examination disclosed that the contractor’s revised disclosure statement does not adequately describe the contractor’s current cost accounting practices. The DCAA indicated that the contractor’s revised disclosure statement also reflects a change in accounting practice and incorporates a number of administrative changes.
Additionally, the DCAA stated that due to the contractor’s inadequate descriptions of accounting practices and accounting treatment concerning the acquired entities, the DCAA is currently unable to determine whether the contractor’s practices comply with applicable Cost Accounting Practices and FAR Part 31. The DCAA recommends that the contractor be requested to submit a revised disclosure statement.
The information in this report should not be used for purposes other than that intended without prior consultation with the Treasury Inspector General for Tax Administration regarding its applicability.
If you have any questions, please contact me at (202) 622-8500 or John R. Wright, Director at (202) 927-7077.
The Office of Inspector General for Tax Administration has no objection to the release of this report, at the discretion of the contracting officer, to duly authorized representatives of the contractor.
The contractor information contained in this report is proprietary information. The restrictions of 18 USC 1905 must be followed in releasing any information to the public.
This report may not be released without the approval of this office, except to an agency requesting the report for use in negotiating or administering a contract with the contractor.
The TIGTA seal was removed due to its size.