Voucher Approval Procedures at the Peninsula Branch of the Defense Contract Audit Agency

GAO was asked to review voucher approval procedures at a branch of the Defense Contract Audit Agency (DCAA). A clinic indicated that DCAA had delayed approval of payments under two clinic contracts and had requested data that required an extensive accounting to satisfy a vague set of needs.

GAO found that payments totaling about $230,000 were delayed because the clinic had not billed an agency for incurred costs as required by the contracts and was unable to provide supporting information on incurred costs when requested. If DCAA had pursued its requests for supporting data, the delays might have been shortened. The delays also could have been reduced if DCAA had advised the agency contracting officials that vouchers from the clinic were being returned or had requested incurred cost data earlier than when it did. DCAA waited almost 3 years after the end of the first fiscal year to request the cost data needed. Because the clinic had not maintained its accounting records in a format that made the information readily available and because so much time had passed, it was more difficult for the clinic to respond to the request. As a result, the clinic incurred additional costs for accounting services to extract the necessary supporting data. DCAA officials indicated that they have recently adopted procedures to notify contractors who do not provide cost information within 12 months after the award of a cost-reimbursement contract of the need to submit such data. These procedures should enable DCAA to identify cost data accumulation problems before payment delays occur. Although it could have acted to reduce the time required for approval of vouchers, the DCAA requests for data to support incurred costs were proper. Except for the delays occurring with the clinic vouchers, GAO found no delays in approving payments under other contracts.