ASSIST AUDIT OF COSTS AND PROPERTY EDGERTON GERMESHAUSEN AND GRIER INC. LAS VEGAS NEVADA FACILITY CONTRACT NO. TE-2191

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65-00523R000100180087-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 21, 2016
• Document Release Date: December 22, 2008
• Sequence Number: 87
• Publication Date: October 23, 1959
• Content Type: MEMO

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SUBJECT: Armlet Audit of Costa and Property
Dimarton. Clernmsbausan. and Grier
Contract No 7E-2191
TO: Contracting Officer
REP: Assist Audit Requested by IOU.
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Anditor Genera
Comptroller, USAF
taetern District
Lielson ?Office
P.O. Box 3155, s.W-
Vaabington, D. C.
3 October 1959
1. Purpose of Domination. An examination has been mile of
the contrea5M-TOMartrant,rmine the propriety and reasonable-
ness of the direct costa incurred under the subject contrect during
the period 1 Migy 1957 to 30 .Pine 1959. In additioa, tests were wade
to determine that property accounting procedures, as they pertain to
contractor-acquired property, were being consistently adhered to.
Station
2. . : at Etion.Inamudh as materiel and services
costs 4 0, or the total costs incurred, the
auditor directed thegreater effort to this area.
(a) Direct Costs. Material Charges mere tested. by ref
erence to paixl invoice. and to receiving records where applicable.
Travel expense was traced. selectively to individual expense reports
and coepared with emplovee labor Charges in the same period. Freight
and express was examined to the extent deemed necessary by reference
to paid freight and awing bills. Other direct charges were examined
and found to consist solely of telephone, talagraph, and TWX costs,
bid& were tested for accuracy and presence of proper controls.
Direct labor coats mere coafirmed only by reference to coot ledger
records and, to an extent, by comparison with travel expense charges,
previous audit having established that adequate controls Were employed.
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Arlie
(b)
Tarty examined
erty records.
?
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Contractor ae d n n-expendable pro.
t audit was traced into accountable prop-
3. Results of Lamina .
(a) Direct Costs. Am a result of the elimination, no
costs were questionek, suWect to the contracting officer's treat-
ment of the items outlined in Paragmg#14.
(b) Property. lanor discrepancies in property records
resulted from ailinterpretation of what constituted. expendable and
non-expendable property. Buildings and fixtures are not carried on
records.
The pending visit of the contracting officer's repre-
sentative in Los Angeles precluded audit of GDP. However, discus-
sion with the local property administrator indicates that weaknesses
disclosed, by the initial survey have not been corrected. Therefore,
because supply channels have been so complex it is recommended that
lists of GEP from the 'MUMS sources be furnished the audit group
from time to time rather than at completion of the contract.
4. Auditor's Comments. The following relates to the auditor's
acceptance, with reservition, of certain costs incurred during the
period I My 2.957 to 30 June 1959:
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(b) Cmertime. Examination of a
closed that approvelves not requested or secured. for eU aver
The total incur:Lydia 0,207.12.
(c) Travel Expense. The auditor did not ontion Et
teiy 43,000 of per dim senereted at theL
six-month period ended 30 al40 1959. A. fixed amount Oiler day
for seven days per week, is paid. to upward of thirteen employees
as incentive for working at the site daily, which necessitates travel
of approximately one Inaldred atlas round trip from hose each
with no mileage reimbursement. In addition, their working day is
not based on portc.140-portal. In view of the circumstances prevail-
ing in this particular phase of the operetion? it is the opinion
of the auditor that these per diem" costs for a five-day working
week are reasonable, also for Saturday and Sunday, but only if the
employees are phyalcaUy at the site. The contractor's representa-
tive infonmel th respect to travel
was outlined ? frog which the
following Nies esmenses...a ter
diemallowanee of #7.50 shall be
This operation, however, is not in the For the
information of the contracting officer, tne cognizant auditor
was not available for discussion of this technicality.
5. general. Numerous minor differences were noted between
cost summary furnished the auditor and cost ledger amounts on the
books. Attached. Is a slemykry of costs as they appear on
the books of the facility.
w. F. Edwards
Audit Lierson Officer
Eastern District
Auditor General
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