DCAA Recently provided updated guidance on the incurred cost proposal through two MRDs (audit guidance memos) and an update to the ICE model.
The first MRD on August 27, 2015, updated the Incurred Cost Proposal Adequacy Checklist to aid in determining the auditability of the proposal. Note that there is no score or definitive guide on adequacy. A proposal with multiple deficiencies may be auditable while another proposal with only one deficiency may not be auditable. Audit teams must use their professional judgment in evaluating deficiencies.
The second MRD on September 30, 2015, updated the Post Year-End and Corporate Incurred Cost Audit Programs. The update resequenced the steps in risk assessment, consolidated reconciliation audit procedures, add a separate small business risk assessment, and updated procedures for subcontracting testing.
DCAA also released ICE Model Version 2.0.1d in August 2015. The latest update is only to Supplementary Schedule C. This schedule identifies prime contracts where the contractor is a subcontractor. The information on this schedule should be the same information as the Schedule J of the prime contractor. Submission of Supplemental Schedule C is not mandatory.
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