Moorestown Branch Audit Identifies $1.2 Million in Unallowable Costs

Moorestown Branch Audit Identifies $1.2 Million in Unallowable Costs

By DCAA Staff Writer

The Defense Contract Audit Agency's (DCAA) Moorestown Branch Office completed an audit of a contractor's fiscal year 2024 incurred cost proposal 90 days before its due date. The audit identified $1.2 million in unallowable employee morale and entertainment costs.

An incurred cost proposal is the contractor's submission of costs it billed to the government. DCAA audits these proposals to help ensure the government pays only allowable costs.

The audit team used data analytics during its initial risk assessment to review the contractor's accounts and identify areas that needed closer attention. This allowed the team to focus its testing on higher-risk transactions, reduce unnecessary work, and complete the audit more efficiently.

Although the team lost several weeks of productivity because of a furlough early in fiscal year 2026, it remained focused and completed the audit ahead of schedule.

The team included experienced auditors and newer employees, combining knowledge of prior audits with fresh perspectives. Their work resulted in approximately 1,200 hours saved, an estimated $235,000 in labor-cost efficiencies, while supporting a thorough review of a complex, high-dollar proposal.

Throughout the audit, the team held weekly internal meetings to track progress and address emerging issues. Team members also met regularly with the contractor to answer questions and resolve issues as they arose. This communication helped keep the audit on schedule and reduced the risk of unresolved issues at the end of the audit.

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

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