Redstone Government Consulting Blog | Compliant Accounting Infrastructure (5)

Contractors need to understand the laws for applying state sales and use taxes to purchased goods and services on government contracts. It can be a costly mistake that eats away at your profit.

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)

Do you have employees in Alabama? There are some changes to the overtime rules you need to be aware of for employers in Alabama.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Government Regulations, Deltek Costpoint

Current and accurate timekeeping is one of the most important responsibilities of a contractor and its employees when they have Government cost reimbursement and time and material/labor hour contracts. Direct labor is one of the significant elements of cost incurred and billed on Government contracts. FAR 16.301-3(a)(3) requires contracting officers to ensure a contractor has an adequate accounting system, which includes a timekeeping system, before award of a cost reimbursable contract. While there is no specific reference to an adequate timekeeping system for T&M/Labor hour contracts, FAR 52.232-7 requires the contractor to be able to support the hours and labor qualifications of the employees charged to the contract. Auditors will request documentation to support employee qualifications and labor hours on T&M/Labor hour contracts. An adequate timekeeping system includes having a written timekeeping policy and procedure to ensure the accuracy and integrity of direct labor costs charged and billed to Government contracts.

Topics: Compliant Accounting Infrastructure, Government Compliance Training, DFARS Business Systems, DCAA Audit Support

On August 9, 2023, DCAA issued guidance to its auditors revising the real-time labor and material testing requirements. DCAA historically referred to these procedures as Mandatory Annual Audit Requirements (MAARs) 6 and 13. DCAA states in its guidance what its auditors need to know is that “[l]abor and material are two of the most significant cost elements billed under government contracts. As such, one of the primary reasons … [DCAA] audit[s] labor and material costs incurred is to determine the accuracy of the charges. The real-time verification of these costs as they are incurred provides valuable confirmation of the accuracy of the charges and can only be accomplished during the accounting period to which they apply.” I cannot really argue with this statement.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support, Human Resources

The year 2023 was a great one for the Unanet Community. I ended the year attending the 4^th Quarter Huntsville Unanet Users Group (HUUG) Meeting, where there was an Ugly Christmas Sweater Competition that I didn’t win. HUUG is such a unique group of Unanet Users in the Huntsville Community. If you are a Unanet user in the Huntsville area and have not already joined, I recommend you do. Reach out to me, and I can provide you with the contact information to get added to the group. If you are outside of the Huntsville area, look for Unanet user groups near you to connect with a peer group for a sense of community, networking and support. I think you will find it beneficial.

Topics: Compliant Accounting Infrastructure, Unanet

In August of 2023, the Defense Contract Audit Agency (DCAA) changed what is used to refer to as Mandatory Annual Audit Requirements (MAARS) 13 audits to Real-Time Audits of Purchase Existence and Consumption. This change was to eliminate the mandatory part of the requirement and introduce greater flexibility based on the auditor’s risk assessment of the contractor.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support, Human Resources

In August of 2023, the Defense Contract Audit Agency (DCAA) changed what it called Mandatory Annual Audit Requirements (MAARS) 6 audits to Real-Time Audits of Labor. This change was to eliminate the mandatory part of the requirement and introduce greater flexibility based on the auditor’s risk assessment of the contractor.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support, Human Resources

QuickBooks is considered a government-compliant accounting system and can definitely get the job done for a lot of small government contractors. However, there may come a time when you need to change your accounting system to something that is designed with government contractors in mind.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Quickbooks

Mandatory Annual Audit Requirements (MAARs) 6 (labor) and 13 (material purchases) are two of DCAA’s mandatory annual audit requirements performed for incurred cost audits. These MAARs, established decades ago, have customarily been performed on a “real-time” basis within the year in which the costs were incurred. However, DCAA has recently revised their audit guidance in a Memorandum for Regional Directors (MRD) titled “Revised Procedures for Real-Time Audits of Labor and Purchase Existence and Consumption.”

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Government Compliance Training, DCAA Audit Support, Government Regulations

New Rule for Filing 1099s: The IRS rule TFA 23O1 reduces the electronic filing requirement from a threshold of 250 Information Returns down to 10.

Yes, you read that correctly. If you file more than 10 Information Returns after January 1, 2024, you are now required to submit those forms electronically. Employers must calculate the total number of Information Returns to determine if they meet the threshold, including 1099s, W-2s, 1098s, etc.

This means if you have a total of 4 Form 1098s and a total of 6 Form 1099-NEC, you must file electronically. All forms must be submitted to the appropriate party and through the IRS site utilizing IRIS or the “Information Returns Intake System” by the due date.

Topics: Compliant Accounting Infrastructure, Government Regulations, Deltek Costpoint