Analysis of DFAS PGI 204.7108: Line-Item Proration Challenges for Cost Vouchers

Abstract

There are multiple Government Accountability Office (GAO) reports that highlight the need for the Department of Defense to resolve ongoing challenges in meeting audit requirements, such as the September 2025 GAO article entitled “Status of Remediation Efforts to Meet Audit Mandates.” Current issues with unmatched disbursements with contractor invoicing contribute to the lack of auditability, underscoring the need for corrective action. This study focuses on addressing line item proration challenges in Cost Plus Fixed Fee (CPFF) contracts. Through data analysis, policy and process reviews, internal controls mapping, and auditability mapping, this study identifies systemic inefficiencies and gaps in current procedures in relation to the automated proration process. The findings indicate that Task Orders that had multi-ACRN (Accounting Classification Reference Number) allocations within a single Contract Line Item Number (CLIN) often led to unmatched disbursement of funds. Potential factors that contributed to unmatched disbursements include weak internal controls and gaps in policy and guidance. This study recommends improvements in contract writing and funding practices, workforce training, and pre-payment and post-payment controls. This research study also recommends establishing an unmatched disbursement prevention structure and modernizing DFARS PGI 204.7108 implementation guidance.