ACO CORB UPDATED EXAM SCRIPTED QUESTIONS AND
SOLUTIONS GUARANTEE A+
✔✔What are the time standards for 'resolving' and 'dispositioning' audits? - ✔✔ACO
shall 'resolve' all audits within 6 months of the audit report issuance date and shall
'disposition' all audits within 12 months of the audit report issuance date. Non-
Reportable Audits have no time limit to resolve but shall be dispositioned within 12
months.
✔✔What are ACO responsibilities with regards to CAFU? - ✔✔a. Ensure all audits are
properly recorded in CAFU and that information is current, accurate, complete
b. Establish and update target dates for resolving and dispositioning audits
c. Resolve and disposition audits in timely manner
d. Consider audit findings in developing pre and post negotiation positions
e. Document actions to resolve/disposition audits
f. Promptly update status of audits: assigned, planned, resolved, dispositioned,
deferred, or forwarded
g. Report questioned costs, sustained amounts, penalties and interest in CAFU
h. Provide copy of PNM, COFD, MFR or other document to auditor
✔✔What are reportable audit types? - ✔✔a. Accounting and management systems
audits, including estimating systems, control environment and overall accounting
systems, billing systems, business systems, compensation systems, material
management and accounting systems, budget and planning systems, labor systems,
information technology systems, purchasing systems, and direct and indirect cost
systems
b. Accounting and management systems follow-up audits
c. Estimating or other system deficiency reports, including real-time reports (also
referred to as "flash" reports). Real-time/flash reports include labor floor checks reports
and purchases existence and consumption verification reports
d. Earned value management systems
e. Post award audits
f. CAS non-compliance reports
g. CAS cost impact statements
h. CAS Disclosure Statements (Initial and Revised) - officially non-reportable but DCMA
treats as reportable
✔✔What are non-reportable audit types? - ✔✔a. Pre-award proposals or proposals for
change orders/mods
b. Forward pricing
c. Progress payments
d. Pre-award survey on accounting systems
e. Assist audits
f. Audit closing statements
g. Auditor determined final indirect rates where disagreement on questioned costs and
no questioned costs subject to penalty
,h. Other audits not defined as reportable
✔✔How do you resolve a CAFU audit? - ✔✔a. DCMA INST-126 P3.6 page 16
b. Reportable audit report is considered resolved when the ACO has determined and
documented an action plan for addressing audit findings in a PNOM or MFR (Memo for
Record). ACO shall resolved reportable audits within 6 months of audit report issuance,
unless regulation or policy provides for earlier date. Read, review audit - assess
significance of findings. Consider all DCAA recommendations and obtain clarifications.
Establish estimate target dates for resolving. Enter remarks to summarize status of
actions taken or planned. Update the status in Remarks from Assigned, to Planned, to
Resolved, to Dispositioned. Decide what position to take - agree/disagree with DCAA.
Document decision/resolution of audit in signed and dated PNOM. Consult with legal
counsel if ACO decision has potential for a claim against the contractor (CAS related).
Obtain Management Review and concurrence with PNOM or MFR documenting the
action plan for addressing the audit findings.
✔✔What must the ACO issue if he/she can't come to agreement with the contractor on
a disallowed cost? - ✔✔Notice of Intent to disallow cost (NOI)
✔✔Who must the ACO obtain approval from to issue the Notice of Intent to disallow? -
✔✔Contracts director, and any required contract management board of review.
✔✔What steps must ACO take prior to reaching a settlement with the contractor,
releasing a withdrawal notice, or issuing a final decision to the contractor? - ✔✔a. MFR
with statement that ACO agreed or disagreed with each audit finding/recommendation
with sound rationale for resolving each; including date of discovery of disallowed costs
b. Obtain management review
c. Coordination with legal counsel
✔✔What actions can the ACO take if contractor submits a written request asking ACO
to determine whether the disallowed costs should be paid or if the contractor files a
claim under the Disputes clause? - ✔✔a. fully consider all DCMA
findings/recommendations
b. prepare a written determination and withdraw the notice within 60 day is ACO finds
costs should be paid
c. negotiate a settlement within 60 days
d. issue final decision within 60 days of receiving certified claim or written request from
contractor FAR 33.211(c)
✔✔What is a DCAA Form 1? When is it used? - ✔✔a. DCAA Form 1 is a Notice of Cost
Suspensions and Disapprovals under Cost- Reimbursement Contracts, to suspend an
item of cost, either direct or indirect, which lacks adequate explanation or documentary
support until the required data are received and a determination can be made as to the
allowability of the item.
, b. There are two types of DCAA Form 1 - regular, which covers one contract; and
blanket, which covers multiple contracts.
c. The are two categories of Form 1 - Notice of Disapproved Costs and Notice of
Suspended Costs
d. Suspended - item of cost, either direct or indirect, which lacks adequate explanation
or documentary support for definitive audit approval or disapproval
e. Disapproved - costs claimed by contractor for which audit action has been completed,
and which are not considered allowable.
✔✔What are expressly unallowable costs? - ✔✔Expressly unallowable costs are
unallowable under any and all circumstances, no exceptions.
i. Interest Expense (FAR 31.205-20)
ii. Donations/Contributions (FAR 31.205-8)
iii. Entertainment (FAR 31.205-14)
iv. Contingencies
v. Bad Debts
vi. Fines and Penalties
vii. Goodwill
viii. Losses on contracts
ix. Alcohol
x. Promotions
xi. Personal Use
xii. Profit Distribution
xiii. First Class Air Fare
xiv. Legal Costs
xv. Travel Costs
Circumstantial Unallowable Costs - costs are either allowable or unallowable depending
on the special and unique circumstances that embody numerous exceptions and special
rules. The majority of cost items addressed by FAR 31.2 fall into this category.
✔✔What is a mass change modification? Give an example. - ✔✔A mass modification
(ARZ Modification) is a modification that affects a group of contracts. The modification
includes a list of all impacted contracts as an attachment.
Examples include:
i. Address change
ii. Change in CMO
iii. Novation or change of name agreement
iv. MOD's at the CAGE level
✔✔What is Federal Procurement Data System (FPDS)? - ✔✔FPDS is a Government-
wide system that reports awards and modifications of Government contracts (summary
information) and is used to provide insight to the public and the Government on how
and where tax dollars are being spent.
SOLUTIONS GUARANTEE A+
✔✔What are the time standards for 'resolving' and 'dispositioning' audits? - ✔✔ACO
shall 'resolve' all audits within 6 months of the audit report issuance date and shall
'disposition' all audits within 12 months of the audit report issuance date. Non-
Reportable Audits have no time limit to resolve but shall be dispositioned within 12
months.
✔✔What are ACO responsibilities with regards to CAFU? - ✔✔a. Ensure all audits are
properly recorded in CAFU and that information is current, accurate, complete
b. Establish and update target dates for resolving and dispositioning audits
c. Resolve and disposition audits in timely manner
d. Consider audit findings in developing pre and post negotiation positions
e. Document actions to resolve/disposition audits
f. Promptly update status of audits: assigned, planned, resolved, dispositioned,
deferred, or forwarded
g. Report questioned costs, sustained amounts, penalties and interest in CAFU
h. Provide copy of PNM, COFD, MFR or other document to auditor
✔✔What are reportable audit types? - ✔✔a. Accounting and management systems
audits, including estimating systems, control environment and overall accounting
systems, billing systems, business systems, compensation systems, material
management and accounting systems, budget and planning systems, labor systems,
information technology systems, purchasing systems, and direct and indirect cost
systems
b. Accounting and management systems follow-up audits
c. Estimating or other system deficiency reports, including real-time reports (also
referred to as "flash" reports). Real-time/flash reports include labor floor checks reports
and purchases existence and consumption verification reports
d. Earned value management systems
e. Post award audits
f. CAS non-compliance reports
g. CAS cost impact statements
h. CAS Disclosure Statements (Initial and Revised) - officially non-reportable but DCMA
treats as reportable
✔✔What are non-reportable audit types? - ✔✔a. Pre-award proposals or proposals for
change orders/mods
b. Forward pricing
c. Progress payments
d. Pre-award survey on accounting systems
e. Assist audits
f. Audit closing statements
g. Auditor determined final indirect rates where disagreement on questioned costs and
no questioned costs subject to penalty
,h. Other audits not defined as reportable
✔✔How do you resolve a CAFU audit? - ✔✔a. DCMA INST-126 P3.6 page 16
b. Reportable audit report is considered resolved when the ACO has determined and
documented an action plan for addressing audit findings in a PNOM or MFR (Memo for
Record). ACO shall resolved reportable audits within 6 months of audit report issuance,
unless regulation or policy provides for earlier date. Read, review audit - assess
significance of findings. Consider all DCAA recommendations and obtain clarifications.
Establish estimate target dates for resolving. Enter remarks to summarize status of
actions taken or planned. Update the status in Remarks from Assigned, to Planned, to
Resolved, to Dispositioned. Decide what position to take - agree/disagree with DCAA.
Document decision/resolution of audit in signed and dated PNOM. Consult with legal
counsel if ACO decision has potential for a claim against the contractor (CAS related).
Obtain Management Review and concurrence with PNOM or MFR documenting the
action plan for addressing the audit findings.
✔✔What must the ACO issue if he/she can't come to agreement with the contractor on
a disallowed cost? - ✔✔Notice of Intent to disallow cost (NOI)
✔✔Who must the ACO obtain approval from to issue the Notice of Intent to disallow? -
✔✔Contracts director, and any required contract management board of review.
✔✔What steps must ACO take prior to reaching a settlement with the contractor,
releasing a withdrawal notice, or issuing a final decision to the contractor? - ✔✔a. MFR
with statement that ACO agreed or disagreed with each audit finding/recommendation
with sound rationale for resolving each; including date of discovery of disallowed costs
b. Obtain management review
c. Coordination with legal counsel
✔✔What actions can the ACO take if contractor submits a written request asking ACO
to determine whether the disallowed costs should be paid or if the contractor files a
claim under the Disputes clause? - ✔✔a. fully consider all DCMA
findings/recommendations
b. prepare a written determination and withdraw the notice within 60 day is ACO finds
costs should be paid
c. negotiate a settlement within 60 days
d. issue final decision within 60 days of receiving certified claim or written request from
contractor FAR 33.211(c)
✔✔What is a DCAA Form 1? When is it used? - ✔✔a. DCAA Form 1 is a Notice of Cost
Suspensions and Disapprovals under Cost- Reimbursement Contracts, to suspend an
item of cost, either direct or indirect, which lacks adequate explanation or documentary
support until the required data are received and a determination can be made as to the
allowability of the item.
, b. There are two types of DCAA Form 1 - regular, which covers one contract; and
blanket, which covers multiple contracts.
c. The are two categories of Form 1 - Notice of Disapproved Costs and Notice of
Suspended Costs
d. Suspended - item of cost, either direct or indirect, which lacks adequate explanation
or documentary support for definitive audit approval or disapproval
e. Disapproved - costs claimed by contractor for which audit action has been completed,
and which are not considered allowable.
✔✔What are expressly unallowable costs? - ✔✔Expressly unallowable costs are
unallowable under any and all circumstances, no exceptions.
i. Interest Expense (FAR 31.205-20)
ii. Donations/Contributions (FAR 31.205-8)
iii. Entertainment (FAR 31.205-14)
iv. Contingencies
v. Bad Debts
vi. Fines and Penalties
vii. Goodwill
viii. Losses on contracts
ix. Alcohol
x. Promotions
xi. Personal Use
xii. Profit Distribution
xiii. First Class Air Fare
xiv. Legal Costs
xv. Travel Costs
Circumstantial Unallowable Costs - costs are either allowable or unallowable depending
on the special and unique circumstances that embody numerous exceptions and special
rules. The majority of cost items addressed by FAR 31.2 fall into this category.
✔✔What is a mass change modification? Give an example. - ✔✔A mass modification
(ARZ Modification) is a modification that affects a group of contracts. The modification
includes a list of all impacted contracts as an attachment.
Examples include:
i. Address change
ii. Change in CMO
iii. Novation or change of name agreement
iv. MOD's at the CAGE level
✔✔What is Federal Procurement Data System (FPDS)? - ✔✔FPDS is a Government-
wide system that reports awards and modifications of Government contracts (summary
information) and is used to provide insight to the public and the Government on how
and where tax dollars are being spent.
