Report on Audit
of Compliance With Cost Accounting Standard 404, Capitalization of Tangible
Assets
September 2005
Reference Number: 2005-1C-171
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.
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September 29, 2005
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: Report on Audit of Compliance With Cost Accounting Standard 404, Capitalization of Tangible Assets (Audit # 20051C0237)
The
Defense Contract Audit Agency (DCAA) examined the contractor’s cost accounting
practices to determine whether the contractor complied with the requirements of
Cost Accounting Standard 404, Capitalization of Tangible Assets, and any
applicable Federal Acquisition Regulation[1] Part 31 requirements during the
period December 1, 2002, through November 30, 2003.
According
to the DCAA, the contractor complied in all material respects with the requirements
of Cost Accounting Standard 404 during the period December 1, 2002, through
November 30, 2003. The DCAA also
reported that the contractor’s accounting system is adequate for the
accumulation and reporting of costs under Federal Government contracts.
The DCAA
audit report was dated December 2003; however, we did not receive a copy of the
report until August 2005. Neither the
Internal Revenue Service nor the Treasury Inspector General for Tax
Administration is shown on the DCAA report distribution list. We are transmitting the report to you to
assist in the management of the contract and to enable the Internal Revenue Service
to track any financial accomplishments derived from negotiations with the contractor
based on results from the DCAA report.
The
information in this report
should not be used for purposes other than those intended without prior
consultation with the Treasury Inspector General for Tax Administration
regarding their applicability.
If you have any questions, please contact me at (202) 622-8500 or
John R. Wright, Director, at (202) 927-7077.
Attachment
NOTICE:
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
U.S.C. § 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.