DCAA stands for The Defense Contract Audit Agency. This agency handles audit and financial services for Department of Defense employees and other federal entities who are responsible for acquisition and contract administration. Government contractors have a demanding set of accounting methodologies which is where DCAA compliance comes into play. A DCAA government contractor checklist can help avoid an audit.
“DCAA compliance” is a common phrase used in the government contracting industry. But it’s important to note DCAA doesn’t actually make contractors “compliant”. When a contractor is “DCAA compliant” it just means they are following all of the recommendations and guidelines under federal law and are ready and prepared for any possible audits. Of course, everyone can avoid an audit if they perform their accounting processes correctly and accurately.
We’ve compiled a DCAA government contractor checklist to help to be DCAA compliant:
Proper time-keeping records:
As a government contractor, it’s crucial that your government time and non-government time are all being tracked properly to the correct contract. Every cost needs a home and then within each contract you must separate all costs as outlined in your contract. This includes direct, indirect, allowed, disallowed, and any other applicable costs.
Keep up with your reporting:
At least every month you should be compiling a report that includes any and all important information regarding your government contract (costs, changes, etc.). This is something that should be done carefully and accurately depending on what is needed for your specific contract. Having this monthly report is a simple way to cover all of your bases and have proper documentation if you need to look back on anything in the future. The DCAA will be checking over your reports to make sure they are done appropriately and are correctly assigned to your contract.
Bill costs properly:
These costs are referring to any materials or supplies you use as well as labor and building use. Make sure to fully understand what costs are allowed and can be billed to your specific government contract. This is something The DCAA will be looking at very closely in order to make sure you aren’t mis-billing certain costs to your contract or to the wrong contract.
While all of this may sound overwhelming and like a lot of work, we’re here to make things easier. We can help you choose compliant software and/or establish processes that will be DCAA compliant, or in many cases, we take over complete responsibility for all of these services. Our outsourced accounting services take the stress out of these challenges by maintaining an acceptable contract cost accounting system. Contact us at our Arnold office to get started with a system that works for you!
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