Learn About the Defense Contract Audit Agency

Learn About the Defense Contract Audit Agency

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Learn About the Defense Contract Audit AgencyWhat is the Defense Contract Audit Agency?

The Defense Contract Audit Agency is a Federal agency that operates within the United States of America that, under the direction and control of the United States Under Secretary of Defense, is responsible for performing contract audits for the United States Department of Defense.
In addition, the Defense Contract Audit Agency is also responsible for providing various accounting and financial advisory-based services regarding contracts and subcontracts to components of the Department of Defense. The services offered by the Defense Contract Audit Agency are connected with negotiation, administration and subsequent settlement of all contracts and subcontracts coordinated by the United States Department of Defense.

History of the Defense Contract Audit Agency:

Audits of military contracts have existed since the 1940s. During this time, the various branches of the military developed their own contract audit functions and associated separate accounting rulings. As a result of the separation between the military branches, uniformity was non-existent in regards to the auditing of military contracts. Government personnel and their coordinating contractors quickly realized the need for consistency regarding the areas of contract administration and audit.

On June 18, 1952 the three military branches jointly issued a Contract Audit Manual; this manual prescribed policies and procedures for use in auditing procurement contracts. As a result of the differences realized between the procurement organizations and the practices of the services, affirming the manual was complicated. In June of 1965, however, the Defense Contract Audit Agency was formed, which uniformly established an auditing system for the procurement of military contracts.

In modern times, the Defense Contract Audit Agency consists of roughly 4,000 people located in more than 300 field offices throughout the United States, the Pacific and Europe. Together, the agency provides standardized contract audit services for the Department of Defense and various accounting and financial advisory services regarding the drafting of contracts and subcontracts for all components of the Department of Defense that are aligned with the procurement and contract administration.

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