DCAA Compliance· · 3 min read
When DCAA Sends an IPA: Answering Document Requests Before They Cost You
The DCAA contracts some audits to independent public accounting firms. Miss their document deadlines and your costs can be questioned or disallowed. How to respond in time.
The DCAA contracts some audits out to independent public accounting firms. They run the same audit, on the same deadlines, and a slow response can turn your costs into questioned or disallowed ones.
Not every DCAA audit is run by the DCAA. The agency, like some other agencies, contracts audits out to an independent public accounting firm, an IPA. The IPA performs the same audit the DCAA would; it is simply contracted to do it. Understanding this matters because of one specific risk that catches unprepared contractors, deadlines.
Same Audit, Different Deadline Pressure
An IPA works from a contract with its own end date. During an incurred cost audit, the auditor selects a sample of items to test, sometimes fifty to a hundred, covering labor, non-labor, and general entries, and asks you to produce the supporting documents by a due date. When those documents come from an IPA on a fixed contractual timeline, the pressure to meet the date is real.
Here is the consequence that makes this more than an administrative detail. If you are slow to respond and the auditor cannot meet their end date because of you, they can note that you were slow, and they can treat the costs you did not support in time as unsupported. Unsupported costs are questioned or disallowed. In other words, a documentation you could have provided can become a cost you are no longer allowed to bill, not because the cost was wrong, but because it was not supported on time.
A late response doesn't just slow the audit down. It can turn a cost you could have supported into one you're no longer allowed to bill, not because the cost was wrong, but because it wasn't supported on time.
How to Respond Without Getting Hurt
The lesson is not to fear the deadline but to engage with it. Two habits keep you safe:
Be responsive, and be realistic. If a due date is genuinely too short, it is reasonable to say so and ask for another week. Auditors can be tight on timelines, so it is fair to step up and negotiate a workable date. What causes damage is letting a due date pass with no response at all, especially with a contracted IPA.
Be able to pull any document fast. You do not know in advance what the sample will include, so responsiveness depends on being able to retrieve any transaction's support quickly, whether it is labor, a vendor invoice, or a journal entry. A system where every figure traces back to its source is what makes a fifty-item request a task rather than a crisis.
This connects directly to what happens when findings do occur. For the downstream picture, see what happens when a DCAA audit finds deficiencies.
How WiseCost Keeps You Responsive
Meeting a document deadline is a retrieval problem, and retrieval is easy only when the records were built to be traceable in the first place. WiseCost keeps an immutable audit trail behind every labor distribution and journal entry it posts to QuickBooks Online, and its reports are exportable, so the support behind a sampled cost is already assembled when the request arrives. Instead of reconstructing records against the clock, you pull them.
Get the DCAA audit-readiness resource. The DCAA Master Audit Program 17740 is the actual program a DCAA auditor follows for the pre-award accounting system review. See it paired with a one-page WiseCost version and an interactive readiness checklist in The DCAA Pre-Award Accounting System Review: What the Auditor Actually Checks.
You can also run our free DCAA Readiness Self-Assessment, or book a demo to see how WiseCost keeps every cost traceable.
Based on the DCAA Ready webinar series, featuring Paul Calabrese, a former DCAA auditor (GRF CPAs & Advisors).