DCAA Compliance – What it means to you. Part II

April 22nd, 2012

Part 2 of a two-part series on DCAA compliance.

Below are a few checklists to help you organize your DCAA pre-awarded contract process, as well as post-award and internal controls needs.

Before you begin the request for proposal (RFP) process for a DCAA-engagement, it’s important to have all your documentation and processes in place prior to submitting the proposal. These items will become must-haves prior to beginning work on the DCAA project; so, why not have them in place beforehand? For assistance, contact us or visit the DCAA.org web site.

Prior to the RFP process, consider this these elements—several of which were covered in more detail in our DCAA Part I blog article from December 2011.

  • Set up a Chart of Accounts to segregate Direct and Indirect Costs
  • Establish a Job Cost Accounting process
  • Account for Indirect Cost Pools and Allocation Bases
  • Determine Indirect Rate Computations
  • Purchase or have a good Timekeeping System and understand the Labor Distribution Requirements
  • Account for Un-allowable Costs

Once you have been awarded the contract, consider these items in your Action List:

  • Re-evaluate previously identified differences in tax expenses
  • Identify significant changes in management or staff since the contract has been awarded
  • Be familiar with the audit type (FAO)
  • List recent guidance or audit program changes
  • Question transactions that resulted in a high number of dollars, but aligned with a low number of hours

Finally, having the right DCAA-compliant software is an invaluable part of your project’s success.

Also, working with a certified DCAA accounting team who knows the ins-and-outs of the contract process, document-recording procedures, unallowable costs identification, and regulations around DCAA-contracts will help make the process easier.

Take your time when considering the requirements of a DCAA contract. Do your homework and talk to contractors with experience in this area. Keeping all the steps, details, and processes top of mind will help to make your DCAA contract experience run that much smoother.

If you have questions about a DCAA audit, contact us. We’d be happy to walk you through the nuance, regulations, and set-up procedures.

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