DARSFinal RuleJanuary 17, 2025

Defense Federal Acquisition Regulation Supplement: Definition of Material Weakness

Finance & BankingOther

Summary

This regulation clarifies what counts as a 'material weakness' in how the Defense Department and its contractors handle their financial records and internal controls. By setting a clear definition, it helps ensure that serious accounting problems are properly identified and fixed, protecting taxpayer money spent on defense contracts.

Key Points

1Establishes a clear definition of 'material weakness' so auditors and contractors know when accounting or control problems are serious enough to report
2Applies to defense contractors and companies bidding for federal defense contracts who must meet strict financial accountability standards
3Helps prevent fraud and misuse of taxpayer funds by requiring transparency about significant financial control problems
4Makes the audit and oversight process more consistent across all defense contractors nationwide
5Requires contractors to disclose and address these weaknesses before receiving new contracts or continued funding

Key Dates

Published

January 17, 2025

Read on Federal Register View Docket

This summary is for informational purposes only. It may not capture all nuances of the regulation. Always refer to the official text for authoritative information.