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What does it mean when someone says "I've had a DCAA Audit"?

Posted by Mike Anderson on Wed, Apr 14, 2021 @ 05:35 PM

Many times when I talk with prospective clients I ask them if they have a DCAA compliant accounting system.  Many times they say "I have a compliant accounting system because I've had a DCAA audit".  Well, what exactly does that mean?   I think it turns out that many people don't really understand the Defense Contract Audit Agency and therefore don't really understand what has been audited.   Of course, the other misconception is that once the DCAA audits your accounting system that they approve the accounting system.  That is not true.  An audit verifies that the concepts and records that were tested were found in compliance but they do not give a certification to a software or to a system as a result of an audit.  As a matter of fact, many times people will say "approved by" the DCAA and that is also an incorrect statement.   I want to quickly examine here the different types of audits performed by the DCAA and what that means.   

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Topics: DCAA audit, DCAA Compliant Accounting Systems, DCAA Accounting System, dcaa approved accounting system,

DCAA Compliant Accounting System Requirements - Understanding the SF1408

Posted by Tyler Link on Wed, Mar 20, 2019 @ 10:59 AM

When a Small Business contracts with the Department of Defense, NASA, or the Department of Homeland Security (and potentially other agencies), they are often required to have a DCAA compliant accounting system. While there are many components of a compliant system (just as there many types of DCAA audits), the underlying procedure for assessing a contractor’s system is guided by the Standard Form (SF) 1408 (also known as the “Preaward Survey of  Prospective Contractor Accounting System”), seen here below:

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Topics: DCAA compliance, DCAA accounting, DCAA Compliant Accounting Systems, DCAA compliant accounting software, SF1408, DCAA Accounting System, DCAA Pre-Award Survey

DCAA Compliance for Small Businesses

Posted by Mike Anderson on Fri, Mar 15, 2019 @ 10:25 AM

Many small businesses come to us with the question of “what do I need to do to have an accounting system that is DCAA compliant”? That is a good question, and somewhat complicated for a small business. See Figure 1 for a quick summary of what is required. In today’s rapid paced electronic world, many people are looking for a panacea software that answers all their needs. Just purchase this software and that is all you need to do. Life should be this simple, right? Well, not exactly. Just like the old computer programming adage, “garbage in, garbage out”, the software is only as good as the knowledge of the operator and the integrity and structure of the information going into the software.

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Topics: Is quickbooks dcaa compliant?, DCAA Accounting System, DCAA QuickBooks, Quickbooks DCAA

Will Not Having An Approved Accounting System Disqualify Our Firm From Bid Opportunities? - PART I

Posted by Dave Donley on Wed, Jul 15, 2015 @ 09:53 AM

Many new/start-up small business federal contractors often ask the question: Will not having an approved accounting system disqualify our firm from bid opportunities? 

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Topics: DCAA accounting, DCAA Compliant Accounting Systems, Government Approved Accounting System, DCAA Accounting System

DCAA Compliant Accounting and System Technology

Posted by Mike Anderson on Wed, Jan 22, 2014 @ 12:32 PM

For many years government contractors have struggled with how to maintain a DCAA compliant accounting system.  The original Contract Audit Manual was created in the Department of Defense in the 1950's.  The Defense Contract Audit Agency (DCAA) was created in the 1960's.  The original requirements for systems were obviously created prior to the use of computers in business.  Now, certainly, the CAM and the DCAA have adopted with changing times and continue to change.  That is not the point.  I think that a lot of the regulations were designed for manual type systems and they have found a way to survive in the regulations.  Even some of the most popular software programs for accounting for government contractors struggle with all the  requirements.  In addition, some of the programs are written on older platforms so the look and feel of the program is somewhat dated. 

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Topics: DCAA compliance, Government Contractors, DCAA Accounting System