Mandatory Procedure

Table of Contents

MP5315.407-90 Contract Audit Follow-up (CAFU)

[2019Edition]

1. This MandatoryProcedure implements the following publications:

a. Officeof Management and Budget (OMB) Circular No. A-50, AuditFollow-up;

b. Departmentof Defense Instruction (DoDI) 7650.03, Follow-up on GovernmentAccountability Office (GAO), Inspector General of the Department ofDefense (IG DoD), and Internal Audit Reports; and

c. Departmentof Defense Instruction (DoDI) 7640.02, Policy for Follow-up onContract Audit Reports.

The publications above establish policy and responsibilities,reporting requirements, and follow-up procedures for contract auditreports issued by the Government Accountability Office (GAO),Inspector General of the Department of Defense (IG DoD), DefenseContract Audit Agency (DCAA), and the other internal audit agencies(such as the Air Force Audit Agency (AFAA)).

2. SAF/AQCP managesthe Air Force CAFU program and delegates the reporting requirementsof DoDI7640.02 to HQ AFMC/PKF.

3. CAFUrequirements for DCAA audit reports:

a. SCO RESPONSIBILITIES: SCOs:

(i) Designate a CAFU focal point to manage the organization s CAFUprogram in accordance with these procedures. The CAFU Focal Point:

(a) Monitors and ensures proper and timelyresolution and disposition of contract audit reports within the focalpoint s organization.

(b) Maintains current records on allreportable audits, from receipt through disposition. For openreports, this includes written milestone plans comprised, as aminimum, of target resolution and disposition dates.

(c) Ensures that acquisition personnel withintheir organization are properly trained in the use of contract auditreports and the requirements of the CAFU program.

(d) Ensures that the organization ssemi-annual CAFU status report is prepared in accordance withthese procedures using the web-based CAFU tool and User s manuallocated on the DefenseContract Management Agency (DCMA) website. When the securityclassification of a contract or an audit precludes the use of theDCMA website, SCOs must seek approval from HQ AFMC/PKF to usealternate means of reporting.

(e) Directs periodic evaluations of theorganization s CAFU program to determine whether they are adequateand result in timely, appropriate resolution and disposition of auditreports.

b. CONTRACTING OFFICER (CO)RESPONSIBILITIES: The CO is responsible for reaching agreementwith the contractor and has wide latitude and discretion in thatregard. Accordingly, the procedure contained herein is structured inconsonance with the independent, decision-making role of the CO andthe financial advisory role of the contract auditor. COs should givefull consideration to contract audit advice and must pursue timelyand proper resolution and disposition of contract audit reports.Resolution of contract audit reports, other than pre-award reports,is required by OMB Circular A-50 to be accomplished within six monthsof report issuance. Disposition should take place as soon as possibleafter resolution. Per DoDI7640.02, Enclosure 3, Section 3.a, reportable audits shouldnormally be disposed of within 12 months after issuance. The CO mustdocument the disposition of all reported findings and recommendationsin a signed and dated memorandum in accordance with DoDI7640.02, Enclosure 3, Section 3.b.

c. TRACKING OF AUDIT REPORTS:Contracting activities must track all contract audit reports.Tracking of non-reportable audits may be accomplished using recordsmaintained in the contract file or in the CAFU on-line system. Thedesignated focal point at each Air Force contracting activitymaintains contract audit follow-up information on a current basis.The audit tracking information will normally be managed centrally atMAJCOM/DRU headquarters (except for HQ AFMC and SMC, where thistracking will occur at the field activity). For auditor-determinedfinal, indirect cost rate reports, a report is considered receivedfor follow-up tracking purposes when it is forwarded by the auditorto the cognizant Administrative Contracting Officer (ACO) forresolution and disposition.

d. REPORTING OF AUDIT REPORTS:Reportable audits are identified in the Glossary of DoDI7640.02. The information to be reported on each audit isidentified in Enclosure 4 of the same regulation. MAJCOM/DRU/SMCsemi-annual status reports will be automatically transmitted usingthe on-line CAFU system. The reports must cover the semi-annualperiods ending 31 Mar and 30 Sep and must be completed in the on-lineCAFU system no later than the end of the reporting period. If thereare no audits, a negative report must be prepared and submitted to HQAFMC/PKF. All activities must make every possible effort to ensurethe completeness and accuracy of their semi-annual reportingsubmission. Special attention should be focused on ensuring the mostaccurate data is submitted on any audit listed as unresolved and over6 months old.

4. CAFU for GAO, IGDoD, and Internal Audit Reports: These procedures apply toaudit reports which disclose contract pricing issues and are issueddirectly to the buying activity. COs shall provide:

a. An initial response to the GAO/IGDoD/Internal Audit Agency within 60 days of receipt of the auditreport; and

b. A copy of the initial response and thedisposition documents to the following:

(i) SAF/FMPF, 1130 Air Force Pentagon, Washington, DC 20330-1130.

(ii) SAF/AQCP, 1060 Air Force Pentagon, 4C149, Washington, DC20330-1060.

(iii) Office of the Inspector General, Department of Defense, Attn: DAIG, GAO Report Analysis, 4800 Mark Center Drive, Alexandria, VA22350-1500.

See AFICC PGI 5315.407-90.