Effective Accounting Policies and Procedures for Better Cost & Pricing Data
DCAA Compliance Summary 06.13.11
1. Government Contractor Compliance Requirements DCAA – Defense Contract Audit Agency FAR – Federal Acquisition Regulation CAS – Cost Accounting Standards Summarized by Teri Wilt 06/13/11
3. Timesheets are required for all employees Employee must record hours worked daily Must report all hours worked if paid or not Only employee can complete his timesheet Employee must know projects to charge to Only paid leave can be recorded in advance Employee must sign & supervisor approves Changes require explanation & both initials Mandatory employee timekeeping training Written timekeeping policies & procedures Timekeeping is an important job function Timekeeping Requirements Teri.Wilt@att.net 3 06/13/11
4. Total time accounting is required for labor Employees record all hours, employee pay per company policy, billing by contract type Non-exempt hourly employees are paid OT by state law, but contract may not allow OT Exempt salaried employees are not eligible for OT and if they work more than standard hours, the hourly rate is prorated on hours Hourly exempt – Paid all hours straight rate Labor Accounting Practices Teri.Wilt@att.net 4 06/13/11
5. Clearly segregate direct vs. indirect costs Collect direct costs by project = contract Exclude unallowable cost per FAR Part 31 Accumulate indirect costs into cost pools Cost pools are logical groupings of costs Allocate indirect on causal beneficial basis Most common indirect cost pools include: Fringe is allocated over total labor dollars Overhead allocated over total direct labor G&A allocated over total direct & indirect Indirect Cost Pool/Burden Rates Teri.Wilt@att.net 5 06/13/11
6. 31.205-1 Advertising 31.205-3 Bad Debts 31.205-7 Costs for contingencies 31.205-8 Contribution/donations 31.205-14 Entertainment expenses 31.205-15 Fines and penalties 31.205-20 Interest expense 31.205-23 Losses on other contracts 31.205-27 Costs of reorganization 31.205-41 Federal income taxes Teri.Wilt@att.net FAR-Expressly Unallowable Costs 6 06/13/11
7. Due six months after company year end ICE form and instructions available online All required ICE schedules are completed DCAA can and will reject for inadequacy Includes actual direct and indirect costs Exclude unallowable from pools not base Reconciliations to all accounting records Shows incurred cost adjusted to claimed Must match Forward Pricing rate structure Must match to CASB Disclosure Statement ICE-Incurred Cost Submissions Teri.Wilt@att.net 7 06/13/11
8. Pre-award Financial Capability Assessment Pre-award System Adequacy– Timekeeping, Accounting, Billing, Estimating, Purchasing Pre-award Flexibly-priced Proposal Audits Forward Pricing Rate Proposal Annual Audit often same rates as Provisional Billing Rates MAAR–Mandatory Annual Audit 19 Reviews Timekeeping Floor Check Audit is 1 MAAR ICE Audit of Incurred Cost Claim submitted CAS (Cost Accounting Standards)-19 Audits DCAA Audits – Pre/Post Award Teri.Wilt@att.net 8 06/13/11
9. Required for Prime contracts & Subcontracts Due 120 days after final indirect rate audits May be at Contract level or Task/D.O. levels Must have final billings from Subcontractors Forms DD882 Patents & DD 1662 Govt Prop Must submit final billing with audited rates Contractor’s Release and Assignment forms will be signed & notarized by notary public See FAR 4.804 – Close-out of Contract Files Contract Closeout/Final Billing Teri.Wilt@att.net 9 06/13/11
10. To avoid wait for final rate audit approval Negotiated between ACO and Contractor Contract work & paperwork must be done Unsettled indirect cost must be < $1M & < 15% FY cum unsettled indirect cost-type Parties must agree on total amounts to pay Rates are final regardless of incurred finals These rates do not apply to other contracts ACO decision may be subjective on history Risk considers accounting system adequacy Refer to FAR 42.708 for more information Contract Quick-Closeouts Teri.Wilt@att.net 10 06/13/11