Response to audit findings
Allow CPFF Contracting Support to support you in “skinnying down” any negative audit findings allowing you to avoid contracting with CPA or legal entities, or at a minimum, narrow their involvement and cost.
Sometimes auditors get it wrong. A typical government audit uses a pre-qualified audit firm with government experience. Even so, auditors can get it wrong. As an example, in 2003 a federal government-appointed audit firm informed one of our clients that all fringe costs were unallowable because those costs were not mentioned in the company’s contract with the federal government.
In fact, the auditor was incorrect.
The company used a combined overhead and fringe cost that had been provisionally agreed to by the federal agency at the time of contract negotiations and was included in the negotiation notes of the agency. Luckily the client had retained the government’s negotiation notes that the government had (miraculously) provided to the client. Based on our provision of these negotiation notes to the auditor, the audit finding was dismissed by the government.
The reason that organizations are provided with the opportunity to respond to audit findings is based on this universal truth – auditors can, and do, get it wrong. No one knows an organization’s business better than the organization itself.
We work with our clients to explain audit findings that are not correct or are unreasonable based on evidentiary and historical documentation, like in the above example.
In some cases, our clients have needed to reach out to CPA and legal services when evidentiary documentations were not available. When CPA and legal services are obtained with a narrow and specific focus, the costs to the organization for those services are typically much less.
CPFF Contracting Support can help you narrow down the questioned costs.
Sometimes auditors get it wrong. A typical government audit uses a pre-qualified audit firm with government experience. Even so, auditors can get it wrong. As an example, in 2003 a federal government-appointed audit firm informed one of our clients that all fringe costs were unallowable because those costs were not mentioned in the company’s contract with the federal government.
In fact, the auditor was incorrect.
The company used a combined overhead and fringe cost that had been provisionally agreed to by the federal agency at the time of contract negotiations and was included in the negotiation notes of the agency. Luckily the client had retained the government’s negotiation notes that the government had (miraculously) provided to the client. Based on our provision of these negotiation notes to the auditor, the audit finding was dismissed by the government.
The reason that organizations are provided with the opportunity to respond to audit findings is based on this universal truth – auditors can, and do, get it wrong. No one knows an organization’s business better than the organization itself.
We work with our clients to explain audit findings that are not correct or are unreasonable based on evidentiary and historical documentation, like in the above example.
In some cases, our clients have needed to reach out to CPA and legal services when evidentiary documentations were not available. When CPA and legal services are obtained with a narrow and specific focus, the costs to the organization for those services are typically much less.
CPFF Contracting Support can help you narrow down the questioned costs.
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