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 3

Posted by Mike Anderson on Wed, Sep 29, 2010 @ 03:05 PM

In the previous two articles in this series we looked at what is required for a DCAA timekeeping system and what types of systems will meet these requirements.  Today I want to look at how the DCAA monitors these systems and what you, as a government contractor, might expect to be compliant. I think you can fairly assume that any time the government comes to your facility to do an audit (pre-award audit, system audit, or other) that they will be interested in looking at your timekeeping system.  But there are also other types of ways that they will check up on contractors timekeeping systems.  This is usually called a Labor Floor Check.  This is where a DCAA auditor shows up at your facility unannounced and randomly samples a few employees and checks for their understanding of the system and how they fill out their timesheets.  They have a detailed audit program that they follow from their Contract Audit Manual and it could be worth while to familiarize yourself with exactly what they might be looking for.  They will be looking for standard stuff like is the employee actually at work, do they know what to charge their labor to, are they recording their labor times daily, do they know the company procedure for timekeeping and are they following it.  There are also guidelines for the auditor to follow if you have remote employees or "work at home" employees.  These two areas are possible areas of misuse and of keen interest to the auditor.  You can be certain that if the auditor finds dicrepancies that your contracting officer will hear about it.  If you cannot resolve these findings with the auditor and/or contracting officer, there can be serious consequences.  All the more reason to make sure your timekeeping system is a good system and you have trained employees to use it properly.
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Topics: Government Contractors, DCAA, DCAA audit, timekeeping

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

Timekeeping and the DCAA

Posted by Mike Anderson on Tue, Jun 01, 2010 @ 01:12 PM

Did you fill out your timecard today?  I'm talking about exempt employees mainly here since non-exempt employees have always had fairly difinitive ways to record time for both government and non-government jobs.  Does anybody remember the "good old days" where you filled out a what looked like a punchcard for all of your hours worked?  How about feeling like your employer didn't trust you even though you were salaried?  Do you have trouble remembering to record your time spent let alone remembering to record the time each day?  You are not alone.  Timecards for government contractors are some of the most difficult paradyme shifts when entering the world of government contracting.  Many systems exist but not all will pass DCAA muster.  The most common problem system involves filling out Excel spreadsheets electronically.  These systems typically don't have the type of controls the DCAA wants to see and will fail a DCAA audit as a result.  There are various "manual" versions of timekeeping (reminiscent of the punch card mentioned above) and there are a host of web-based systems that have been developed specifically to meet the DCAA requirements.  If you have any questions about your system, seek professional help prior to your DCAA audit to make sure your system will pass.
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Topics: DCAA compliance, DCAA, DCAA audit, timekeeping