Normally, I make numerous references to the Federal Acquisition Regulations (FAR) when writing. However, there is only one FAR reference for this topic, and then we must turn to the Accounting Standards Codification (ASC). In this case, that single FAR reference is FAR 31.201-2(a)(3).
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)
CAS 411 provides criteria for accounting for the measurement and assignment of material costs to cost objectives and follows generally accepted accounting principles (GAAP).
If you don’t have contracts subject to full CAS, then FAR 31.205-26 Material costs requires contractors to implement GAAP when accounting for material. Material costs can either be charged direct to a contract or assigned to contracts through inventory accounts. Material that is charged direct should be identified on the purchase order and material assigned through an inventory account should be consistently applied by category of material. While CAS 411 requires written policies for accounting for material, it is a best practice to establish written policies whether CAS 411 is applicable or not.
Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Material Management and Accounting System (MMAS)
The Department of Defense (DoD) Comptroller announced the new Defense Contract Audit Agency (DCAA) Director on October 21, 2024, as Ms. Jennifer Desautel. Ms. Desautel was previously the Assistant Director, Policy and Quality was responsible for the formation, development and issuance of contract audit policy and quality assurance within DCAA and its over 4,000 employees in nearly 300 locations. The DoD Comptroller in his announcement sited her extensive experience with DCAA operations and mission as well as her strong alliances across DoD and industry made her ideally suited to lead DCAA.
Topics: Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support, Government Regulations
So, the title is maybe a little misleading, and don’t worry – DCMA won’t let you forget the Government property during contract closure. Government property closeouts are only a singular piece to the contract closeout process. And like with all things Government property, the closeout process takes teamwork from both the contractor side and the Government side to be successful.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)
Every small business that receives a Federal Government cost reimbursable contract is expected, by the Defense Contract Audit Agency (DCAA), to have a “sound internal control environment, accounting framework, and organizational structure.”
Topics: Compliant Accounting Infrastructure, Small Business Compliance, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
FAR 31.205-20 makes interest unallowable, however, cost of money is not interest based on the CAS Board and is allowable (see our article Interest is Unallowable – How is That Possible). Cost of money is an imputed cost that is provided to contractors to recover the time value of money invested in facilities and equipment that benefit government contracts. Contractors that do not have contracts subject to full CAS, follow FAR 31.205-10 Cost of money which incorporates CAS 414 (Cost of Money as an Element of the Cost of Facilities Capital) and CAS 417 (Cost of Money as an Element of the Cost of Capital Assets Under Construction) and allows cost of money as a cost as long as it is measured, assigned and allocated in accordance with the standard. Cost of money must be specifically identified and proposed in cost proposals to be claimed or billed. Let’s discuss the requirements of CAS 414 and 417.
Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
The Court of Appeals decision came out on June 26, 2024, and I have been trying work it through my head how they got to their decision. I for sure do not have an answer but I have come up with some ideas and concerns. International Development Solutions, LLC v. Secretary of State, U.S. Court of Appeals, Federal Circuit, 68 CCF ¶82,658, (Jun. 26, 2024)
Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)
The Defense Contract Audit Agency (DCAA) wants to re-connect with you. About four years ago, DCAA was looking around and evaluating its workload and saw a problem: it was going away. With a previously perennial favorite of the incurred cost backlog finally going away and few incurred cost audits due to sampling, DCAA had to look for how it can still be important to the acquisition community.
Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DCAA Audit Support
In the June 27, 2024 Federal Register, the Department of Defense (DoD) is proposing to change the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2021 requiring that the generally accepted auditing standards (GAAS) definition of a “material weakness” be used in place of the current definition of a “significant deficiency” when evaluating a contractor’s business system.
Topics: Small Business Compliance, DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
The rush to close any accounting system for the previous year is everyone’s top priority at the beginning of the new year. Why? We have forms to file. We have performance numbers to report. The annual Incurred Cost Submission is a top priority for government contractors with cost-type contracts. The Incurred Cost Electronically (ICE), or Incurred Cost Submission (ICS), is a highly formatted spreadsheet model with many worksheets (17 required and 6 optional) that provides a standard electronic package to assist in preparing adequate incurred cost submissions. The ICE spreadsheet model also helps with audit support and is the final version of reported costs incurred and billed within a year.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Unanet