# AFFARS MP5315.407-90

#### Mandatory Procedure

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

June 2006

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

(a) This mandatory procedure implements OMB Circular No. A-50, Audit Follow-up, DODD 7640.2, Policy for Follow-up on Contract Audit Reports, and DODD 7650.3, Follow-up on GAO, DoD/IG, and Internal Audit Reports. These directives establish responsibilities, reporting requirements, and follow-up procedures for contract audit reports issued by the General Accounting Office (GAO), Department of Defense Inspector General (DoD/IG), Defense Contract Audit Agency (DCAA), and the other internal audit agencies (such as the Air Force Audit Agency (AFAA)).

(b) SAF/AQCP is responsible for managing the Air Force’s CAFU program and has delegated the reporting requirements of DODD 7640.2 to HQ AFMC/PKPB.

(c) Contract Audit Follow-Up (CAFU) requirements for DCAA audit reports:

(1) MAJCOM RESPONSIBILITIES: MAJCOM Directors of Contracting shall –

(i) Designate a CAFU focal point to manage the command’s CAFU program in accordance with the OMB Circular A-50, DODD 7640.2, and these procedures. The CAFU Focal Point must:

(A) Monitor and ensure proper and timely resolution and disposition of contract audit reports within their commands.

(B) Maintain current records on all reportable audits, from receipt through disposition. For open reports, this includes written milestone plans comprised, as a minimum, of target resolution and disposition dates.

(C) Ensure that acquisition personnel within their command are properly trained in the use of contract audit reports and the requirements of the contract audit follow-up program.

(D) In accordance with DODD 7640.2, ensure that the MAJCOM’s semi-annual contract audit follow-up status report is prepared in accordance with these procedures using the web-based CAFU tool located on the DCMA website. (Note: the CAFU User’s Manual and Guide can be accessed via the AFMC CAFU website.)

(E) Direct periodic evaluations of the command’s CAFU program to determine whether they are adequate and result in timely, appropriate resolution and disposition of audit reports.

(2) CONTRACTING OFFICER (CO) RESPONSIBILITIES: The CO is responsible for reaching agreement with the contractor and has wide latitude and discretion in that regard. Accordingly, the procedure contained herein is structured in consonance with the independent, decision-making role of the CO and the financial advisory role of the contract auditor. COs should give full consideration to contract audit advice and must pursue timely and proper resolution and disposition of contract audit reports. Resolution of contract audit reports, other than pre-award reports, is required within six months of report issuance (per OMB Circular A-50). Disposition should take place as soon as possible after resolution. Reportable audits should normally be disposed of within 12 months after issuance.

(3) TRACKING OF AUDIT REPORTS: Contracting activities must track all contract audit reports. Tracking of non-reportable audits may be accomplished using records maintained in the contract file or in the CAFU on-line system. The designated focal point at each Air Force contracting activity should maintain contract audit follow-up information on a current basis. The audit tracking information will normally be managed centrally at MAJCOM headquarters (except for HQ AFMC, where this tracking will occur at the field activity). For auditor-determined final, indirect cost rate reports, a report is considered received for follow-up tracking purposes when it is forwarded by the auditor to the cognizant ACO for resolution and disposition.

(4) REPORTING OF AUDIT REPORTS: Reportable audits are identified in Enclosure 4 of DODD 7640.2. The information to be reported on each audit is identified in the DOD Directive. Each MAJCOM’s semi-annual status reports will be automatically transmitted using the on-line CAFU system. The reports must cover the semi-annual periods ending 31 Mar and 30 Sep and must be completed in the on-line CAFU system within 15 days after the end of the period. If there are no audits, a negative report must be prepared and submitted to HQ AFMC/PKPB. All activities must make every possible effort to ensure the completeness and accuracy of their semi-annual reporting submission. Special attention should be focused on ensuring the most accurate data is submitted on any audit listed as unresolved and over 6 months old.

(d) Contract Audit Follow-Up for GAO, DoD/IG, and Internal Audit Reports: These procedures apply to audit reports which disclose contract pricing issues and are issued directly to the buying activity. CO’s shall provide:

(1) An initial response to the GAO/DoDIG/Internal Audit Agency within 60 days of receipt of the audit report; and

(2) A copy of the initial response and the disposition documents to the following:

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

(ii) SAF/AQCP, 1060 Air Force Pentagon, Washington DC 20330-1060.

(iii) Office of the Inspector General, Department of Defense,
Attn: DAIG, GAO Report Analysis, 400 Army Navy Dr, Arlington VA 22202.

##### STATUS REPORT ON SPECIFIED CONTRACT AUDIT REPORTS, OPEN REPORTS

(Report Control Symbol DD-IG(SA) 1580)
OPEN REPORT

For Period Ending
DoD Component USAF
MAJCOM

| Audit Report Number | Report Date (1) | Contractor Name | Type of Audit (2) | Cost Questioned or Cost Avoidance | Deferred for Criminal Investigation (3) | In Litigation (4) | Resolved or Unresolved (5) | Resolution Target Date (1) | Reporting Activity (6)
A. Overaged Reports (Over 12 Months Old) B. Reports 6-12 Months Old C. Reports Less Than 6 Months Old D. Reports In Litigation E. Reports Involved In Criminal Investigation |  |  |  |  |  |  |  |  |  |

Note:
(1) Year, month, day.
(2) Use codes listed in DODD 7640.2 Attachment 3 to Enclosure 3.
(3) If investigative organization has requested deferral of resolution or disposition action, list date of request.
(4) Docket/Case No. or no (N).
(5) For resolved audits: insert R and date of resolution. For unresolved audits: insert U and resolution target date.
(6) Use DFARS Appendix G Activity Address Numbers.

STATUS REPORT ON SPECIFIED CONTRACT AUDIT REPORTS, CLOSED REPORTS
(Report Control Symbol DD-IG(SA) 1580)
OPEN REPORT

For Period Ending
DoD Component USAF
MAJCOM

| Audit Report Number | Report Date (1) | Contractor Name | Type of Audit (2) | Date of Disposition (1) | Cost Questioned or Cost Avoidance | Cost Sustained/ Avoided | Reporting Activity (3)
A. Reports listed as overaged in prior report B. Other reports closed during period |  |  |  |  |  |  |  |

Note:
(1) Year, month, day.
(2) Use codes listed in DODD 7640.2 Attachment 3 to Enclosure 3.
(3) Use DFARS Appendix G Activity Address Numbers.