Section 809 Panel - Recommendation #73 - Revise the definition of business system deficiencies to more closely align with generally accepted auditing standards

Abstract

The definition of the term significant deficiency for contractor business systems in Section 893 of the Fiscal Year 2011 National Defense Authorization Act (NDAA) and the Defense Federal Acquisition Regulation Supplement (DFARS) does not align with generally accepted auditing standards for evaluating and reporting on internal control deficiencies. This lack of consistency creates confusion regarding the identification, severity, meaning, and resolution of deficiencies. The term significant deficiency and its definition need to be stricken and replaced with the term material weakness.