DCAA Moorestown audit flags $1.2 million in unallowable contractor costs

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DCAA audit flags unallowable costs

Highlights

DCAA Moorestown audit identifies $1.2 million in unallowable contractor costs in fiscal year 2024 incurred cost proposal, completed 90 days early.
Audit employs data analytics for risk assessment, saving about 1,200 work hours and $235,000 in labor costs despite an early FY 2026 furlough.
DCAA's findings support DCMA in final rate negotiations, potentially securing further government savings and increasing contractor oversight.

Audit findings and early completion

As reported by the Defense Contract Audit Agency, its Moorestown Branch Office completes the audit of the contractor’s fiscal year 2024 incurred cost proposal 90 days ahead of schedule after identifying the questioned spending. An incurred cost proposal covers expenses billed by a contractor to the government, and DCAA reviews those submissions to help ensure public funds cover only allowable costs.

The audit team uses data analytics during its initial risk assessment to examine the contractor’s accounts and pinpoint areas requiring closer review. That approach lets auditors focus testing on higher-risk transactions, limit unnecessary work and complete the assignment more efficiently.

Although the branch loses several weeks of productivity because of a furlough early in fiscal year 2026, the team remains on track and finishes the work ahead of deadline. DCAA says the effort combines experienced auditors and newer employees, producing about 1,200 hours in saved time and an estimated $235,000 in labor-cost efficiencies while supporting a detailed review of a complex, high-dollar proposal.

Government savings and oversight implications

Throughout the audit, team members hold weekly internal meetings to monitor progress and respond to emerging issues. They also meet regularly with the contractor to answer questions and resolve concerns as they arise, helping keep the audit on schedule and reducing the risk of unresolved issues at the end of the process.

The Moorestown Branch also works closely with the Defense Contract Management Agency, providing documentation to support the findings. That coordination helps DCMA use the audit results during final rate negotiations and may lead to additional savings for the government.

The audit team includes Supervisory Auditor Mark Gawlinski and auditors David Hensel, Jennifer Hernandez, Amanda Ruth, Jacob Miller, Jeffrey Saintvil and Connor Zorger.

In our earlier article on Malaysia’s Budget 2027 spending increase ahead of GE16, we noted that federal allocations often rise around election cycles and that 2027 outpaced many prior election-year budgets. We also highlighted drivers behind the higher outlays—such as larger supplies-and-services allocations and cost pressures from policy and event preparations—alongside the broader challenge of keeping spending efficient while pursuing fiscal consolidation goals.

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