DCAA Compliance Blog

Your Source for DCAA News and Information for Contractors

ReliAscent® LLC is the only government contract accounting firm that specializes in all aspects of government contracting compliance.  From our DCAA compliant accounting services, to monthly government contract accounting for all government agency awards, contract management & administration, and financial services & planning, our goal is to ensure the success of our clients, and all small business government contractors and grantees.  

In our DCAA Blog, we discuss the latest government contracting news from the Federal Government, the DCAA, and DCMA, as well as promotions offered by ReliAscent, and helpful tools and resources for contractors.

We hope you will visit and take part in the discussions on our blog on a regular basis. If you ever have any questions or would like to discuss how our experts can help, do not hesitate to contact us at any time!  


 

DCAA Timekeeping Requirements - Part 2

Posted by Mike Anderson on Wed, Sep 22, 2010 @ 02:30 PM

Uncompensated Overtime DCAA

Last week we looked at the DCAA requirements for Timekeeping on a government contract and this week I want to explore the different types of systems.  For small companies, a manual timekeeping system is probably sufficient and cost effective.  This requires that the employee has only 1 timecard that they fill out daily in ink.  The supervisor must monitor arrival & departure to help verify the time record at the end of the time period.  Corrections are made in ink, with an explanation, dated & signed.  These timecards must be reviewed and approved by the supervisor prior to entry into the accounting system.  As the company size grows, it makes not only economic sense but procedural sense to move to a more automated system.  So what is the difference?  The basic requirements of both types of systems are the same.  Daily recording, correct charge codes used, corrections having a complete audit trail, approval cycles, etc. are required of both types of systems.  We have seen some companies get into trouble by setting up an "electronic" timekeeping system based in a spreadsheet software like Microsoft's Excel.  Excel lacks several key ingredients like the change control/audit trail & approval processes that the DCAA needs to see.  The audit trail needs to include the original entry, a description of the change, initialed, authorized and dated by both the employee and the supervisor.  Automated systems also must insure that only the employee can access their specific record (nobody else can record time on another employees timesheet).  Of course, the supervisor must also have access to the employee's time record for monitoring and for approval.  There are many timekeeping software packages on the market today but only a select few have DCAA approved packages and you usually have to ask specifically for the DCAA approved package.  Tech Biz has worked with many of these and we know the pro's and con's for them.  While there is no one simple answer (there are lots of variables, lots of extra features and certainly costs to weigh) we can usually help steer clients to the most cost effective solution on an automated system to meet each company's specific needs.  Timekeeping is a key ingredient to effective government contracting and meeting DCAA requirements.  It is probably the number 1 audit finding by the DCAA.  You need to make sure and get this one right.

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Topics: government contractor, DCAA, DCAA guidance, timekeeping


DCAA Timekeeping Requirements - Blog Part 1

Posted by Mike Anderson on Fri, Sep 17, 2010 @ 02:05 PM

For many new government contractors and/or small government contractors, it may be confusing as to what is required and why it is required in timekeeping records.  This is a very important topic to the government and the government contractor should not underestimate the importance or the need to do it in accordance with what the government expects.  Failure to meet these expectations will most certainly result in some stiff lessons, including delayed payment and/or refusal of future contracts.  So what is exactly required by the government?   If you look in the DCAA Contract Audit Manual Chapter 5 you will find very specific requirements that the DCAA will look for in a timekeeping system (Para 5-908 & 909).  This requires procedures for the proper use, controls, preparation of and recording of actual times worked.  DCAA auditors will be looking to see that 1) all hours worked for all employees are recorded (this includes all direct and all indirect work), 2) the proper job assignments are made by different individuals than are performing the work (to the extent practical), 3) daily recording of time worked by the employee, 4) an audit trail for any & all changes, 5) employee review/approval, 6) supervisor review/approval, 7) evaluation of labor distribution, 8) reconciliations between the distribution summary and the labor charges and 9)procedures to assure all hours worked (even if they are not billable) are recorded.  This seems fairly simple to read but it is always difficult to implement.  Tech Biz has set up numerous compliant timekeeping systems for our clients and have some "boilerplate" procedures that can be adopted to almost any situation.  The difficult part becomes in following the procedures.  Look for Part 2 of this series where I will talk about the different types of systems including manual and automated systems.
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Topics: DCAA guidance, timekeeping


Happy Thanksgiving from TechBiz Solutions

Posted by Mike Anderson on Wed, Nov 25, 2009 @ 01:23 PM

Sometimes we forget the real meaning of the Thanksgiving holiday.  At the risk of sounding like an actor that has not rehearsed his acceptance speech when receiving an Academy Award, here is an incomplete list at best.

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Topics: business consultants, DCAA accounting, government cost accounting, DCAA guidance


Changes in the DCAA

Posted by Mike Anderson on Wed, Nov 11, 2009 @ 04:55 PM

Wow, we are seeing a lot of changes in the government's auditing agency lately.  We have seen it written up twice in the last 18 months by the GAO.  Senator McCaskill (Chair of a Homeland Security and Governmental Affairs SubCommittee on Contracting Oversight) gave a searing evaluation of the DCAA when she was interrogating April Stevenson in a hearing on September 23, 2009 (http://www.youtube.com/watch?v=CnuiQhpAqf0).  Director Stevenson was fired within a month of this hearing.  We have seen the effects of all of this in the DCAA audits that Tech Biz has participated in recently.  The DCAA is becoming much more detail oriented, more serious and much less forgiving in their auditing.  There are more items that previously were overlooked that now are being written up.  Any discrepancy that is found is now being written up and it only takes one discrepancy to fail the entire system now.  This is serious.  It means that small businesses must be maticulous in making sure their accounting system is in complete and perfect compliance with the many FAR and GAAP regulations that the DCAA uses for audits.  Many small businesses don't have the expertise to know exactly what is required or the time to figure it out and still be profitable.  The margin for error has been reduced.  What is a small business to do?  Certainly they can look for personnel that have experience in government contracting.  Even then, how familiar will these people be with all the FAR regulations and the more recent changes?  If the small business is lucky enough to find someone with these qualifications, the cost of hiring such an individual is very high.  We think that small business should turn to consultants that only do this for a living.  This is the affordable way to get the expertise needed to comply with the regulations and pass an audit. 
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Topics: DCAA, DCAA audit, DCAA guidance


DCAA audits becoming more stringent

Posted by Mike Anderson on Fri, Jul 24, 2009 @ 12:13 PM

 

Since the DCAA memo released in December (see our blog: "DCAA 2008 Year End Guidance, Happy Holidays, Government Contractors") we have noticed a trend from the DCAA becoming more strict in their interpretation of the regulations.  This trend culminated last week in a very difficult DCAA audit (probably the most difficult we have ever seen).  This audit would have gone very smoothly in the past but due to the added intensity from the DCAA, it became very difficult and almost confrontational.  The end result is that this contractor is still negotiating with the DCAA about issues.   At Tech Biz we currently have 2 former DCAA auditors on our staff and they are extremely knowledgeable in navigating these new directions set down from the DCAA office.  In short, we are in a unique position to be able to truly help small businesses with these issues.  

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Topics: DCAA compliance, DCAA audit, DCAA guidance