Analysis of DFARS 252.242-7006 Accounting System Administration Significant Deficiencies

Abstract

This capstone research study presents an analysis of Defense Federal Acquisition Regulation Supplement 252.242-7006 Accounting System Administration within the Department of Defense (DOD). Addressing the critical gap in existing literature, this research study evaluates factors leading to significant deficiencies in contractor accounting systems, crucial for the DOD, which allocated $1.3 trillion dollars to contractors from fiscal years 2020 through 2022. Employing both qualitative and quantitative methodologies, this research examines data from the Defense Contract Management Agency’s Contractor Business System Determination Timeline and the Electronic Document Records Management System Integrated Workload Management System. This research addresses four questions regarding audit report factors that lead to significant deficiencies, their relationship to Section 809 Panel Recommendation 72, auditor improvement recommendations, and the comparison between contractors’ response and contracting officers’ determinations. This study’s significance is twofold. It advances the understanding of accounting system administration in government contracting, and it provides actionable insights for policy and practice enhancements. The findings aim to guide contractors in refining their accounting systems to avoid disapproval and minimize associated costs. Recommendations are provided based on findings.