Rockville, Maryland, February 28, 2017 — Aronson LLC, a leading provider of assurance, tax and consulting services to government contractors in the mid-Atlantic region, today announced a highly customizable service offering that helps defense contractors comply with the Defense Federal Acquisition Regulations Supplement (DFARS) 252.204-7008, “Compliance with Safeguarding Covered Defense Information Controls,” and 252.204-7012, “Safeguarding Covered Defense Information and Cyber Incident Reporting.” Compliance with these new regulations will be necessary to receive new contract awards in the future.
On December 30, 2015, the U.S. Department of Defense (DoD) published the interim rule which gave contractors until December 2017 to implement all the security requirements within the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, “Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations.” Contractors must notify the DoD Chief Information Officer (CIO), within 30 days of award, of any NIST SP 800-171 security requirement that has not been implemented at the time of contract award. The implementation of the NIST SP 800-171 security requirements is not only limited to contractors, but it also flows down requirements to sub-contractors affecting the entire supply chain.
“Through this service offering, we are excited to demonstrate our next generation thought leadership in addressing cyber risks and DFARS compliance. Our in-depth contract compliance experience makes us uniquely positioned to help our clients with controls implementation and superb risk management execution,” said Payal Vadhani, Aronson’s lead Technology Risk Services partner.
Aronson has extensive experience and deep knowledge of many NIST standards and frameworks. The firm is equipped with multiple accelerators that help to significantly reduce the time it takes for its clients to become DFARS compliant and ensure clients’ continued eligibility to receive contract awards. The goal of this new service offering is to help clients reduce costs and mitigate risks.
Aronson Managing Partner Larry Davis commented, “Our firm has been a trusted advisor to government contractors for over 35 years. This service offering is a direct reflection of our commitment to proactively contribute to the success of our clients.”
The White House announced Monday morning that President Trump will propose increasing the defense budget by 10% or $54 billion. This increase in spending will be offset by corresponding reductions to discretionary non-defense spending. Details regarding what the increase in defense spending will be used for or what other programs will be cut were not shared. An official from the Office of Management and Budget (OMB) stated the current thinking is to allow the Pentagon to spend the additional $54 billion as they see fit. The statement issued by the White House quoted President Trump as saying the budget would also focus on law enforcement and veterans. Therefore, it appears programs in these areas will not be cut. Conversely, the statement did indicate that foreign aid would be substantially reduced though the OMB official noted that most agencies would see a substantial reduction in their budgets. President Trump has previously stated he would not cut Social Security or Medicaid and foreign aid is a small part of the budget, so the bulk of the cuts must come from other domestic programs.
A more detailed, though still summary budget is expected in mid-March and a final budget should be ready by April. However, even without details it is clear there will be more opportunities for defense contractors and less for civilian agency contractors, especially contractors working in the area of foreign aid. Stay tuned for more details.
With 2017 under way, many companies are preparing for annual financial statement audits. While the audit process can be cumbersome, here are some steps to make the process as painless as possible.
Remember financial statement auditors work to assist management in identifying opportunities for further improvement and to increase overall confidence in company financial data. They provide reasonable assurance on the accuracy of a company’s financial numbers and the operating effectiveness of internal control design. Annual financial statement audits provide a second look into financial performance, and insight into a company’s strengths and weaknesses.
What happens before the annual financial statement audit begins?
On February 10, 2017, the GSA released a Request for Information (RFI) for government-wide entity identification and validation services. The GSA is exploring options for replacing Dun and Bradstreet (D&B), who is the current provider of entity identification and validation services through the use of D&B’s Data Universal Numbering System Number or DUNS number.
Currently, the government requires the assignment of a DUNS number for the identification of commercial, nonprofit, or government entities. All government contractors are required to obtain and maintain a DUNS number to do business with the government in order “to better trace Federal dollars from appropriation to final outcomes or results.”
Lexy Kessler was quoted on February 6, 2017 in a Washington Technology article entitled “Early Lesson from NCI Breach: Double Check Financial Oversight.” In January 2017, news came to light that the controller of NCI Inc. embezzled $18 million over the past six years. Lexy shares her industry knowledge throughout the article, noting that for public companies, she “would highly recommend that it is a third party forensics team comes in with attorneys to understand the landscape of what you are doing, [a team] who understands you have investors that you’re reporting to.”
Lexy suggests, “With any crisis, companies must investigate how it occurred. Unfortunately, in today’s technology environment, it is near impossible to catch every potential problem. That said, companies learn everything they can about a breach and put into place a corrective action. Then, communicate to everyone who needs to know—lenders, investors, the board of directors and employees.”
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