DCAA – The Hidden Cost of Audits

Where does DCAA’s View of the Contractor and their Role in Acquisition Come From?

DCAA Auditor Training

DCAA website provides that new auditors receive in-depth professional training from DCAA’s Defense Contract Audit Institute (DCAI), along with on-the-job training at their assigned field audit office. DCAI is located in Atlanta, GA and provides auditors with an excellent basis on which to start their careers in contract audit. Many at Redstone GCI can speak from personal experience that, once you get past the exciting MARTA ride from the airport, the instructors at DCAI provide a good hands-on learning environment. However, we are not sure if it is a subliminal message piped into the classroom or local indoctrination at assigned field offices, but the auditors are coming away with the impression that no contractors can be trusted, and a good audit opinion has to include questioned cost.

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Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Incurred Cost Submission, Defense Contractors, DOD IG, Government Compliance Training, DFARS Business Systems, Incurred Cost Proposals, Cost-Type Contracts, DCAA Audit Support, FAR, Government Regulations, DOD Contractors, Cost Accounting Standards (CAS)

Time to Get Your Training On

You’re probably not feeling quite like THIS about training, but we do want to remind you of a few topics that you, as a federal government contractor, need to address with your workforce on a fairly regular basis. We can’t hit them all, but this is a list of those that should be on the radar of your Human Resources staff and are relevant to most contractors.

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Topics: Contracts Administration, Government Compliance Training, Human Resources, OFCCP, Affirmative Action, Drug-Free Workforce, CoBEC, EEO, Anti-Human Trafficking

Thought There Were 52 Unallowable Costs – Not So Fast

A Little Background

FAR Part 31, Cost Principles, is the regulation that government contractors must follow in order to account for cost on most government contracts. Within FAR Part 31 is FAR 31.205, Selected Costs. This part of the cost principles regulation specifically spells out unallowable cost that the government will not pay for under a government contract. This section starts at FAR 31.205-1 and goes all the way up to FAR 31.205-52. However, it should be noted that FAR 31.205-2, 5, 9, 24, 45, and 50 are “Reserved” – These reserved cost areas went the way of the dinosaur over time, hopefully not to return. For example, FAR 31.204-2, Automatic Data Processing Equipment Leasing Costs, required an annual demonstration that leasing computer equipment was cost-effective, i.e., lowest cost to the Federal Government.

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Topics: Incurred Cost Submission, Contracts Administration, Defense Contractors, Government Compliance Training, Incurred Cost Proposals, Cost-Type Contracts, DCAA Audit Support, FAR, Government Regulations, DOD Contractors

Government Contractor Timekeeping Compliance

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Timekeeping compliance is a combination of several critical pieces, involving everyone within an organization. With specific requirements for government contracts, it is crucial to develop a structure and process for timekeeping and compensation in government contracts. Here are some considerations when reviewing your company’s timekeeping compliance:

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Topics: Government Compliance Training

What to Expect from a DCAA Floor Check

The objectives of a timekeeping system are to ensure that labor costs are accurately and timely identified as either direct or indirect in the accounting system.  For certain contract types (e.g. cost-type), these accumulated labor costs are reported and billed to the customer.  It is the contractor’s responsibility to ensure that the labor costs posted in the timekeeping system are proper and reliable. 

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

Are you prepared for an Equal Employment Opportunity (EEO)/ Affirmative Action Evaluation?

Are you prepared for a compliance evaluation from the Office of Federal Contract Compliance Programs (OFCCP)? If you’re a government contractor or subcontractor employing at least 50 people and having a contract or subcontract of $50,000 or greater, you need to be. The OFCCP is under the umbrella of the Department of Labor and their goal is to “protect workers, promote diversity and enforce the law.” OFCCP administers the following laws, all of which are specific to government contractors:

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Topics: Contracts Administration, Government Compliance Training, Human Resources

Is My Accounting System Adequate, Acceptable or Approved...Does it Matter?

To the uninformed, there may be little or no distinction between the three adjectives which could apply to a contractor (or potential contractor) accounting system. To those dealing with the terminology in government solicitations, there may appear to be no significant distinction because the words seem to be used interchangeably. For example, an Air Force solicitation may have a prerequisite for an adequate accounting system, in contrast to Navy solicitation which substitutes the words acceptable accounting system. Then a third alternative could be a solicitation which gives competing bidders points for approved systems; i.e. 500 points for having an approved accounting system. In most cases, the solicitation links the accounting system status (adequate, acceptable or approved) to an action (written opinion or written determination) by a federal government agency or, less frequently, an opinion by an independent third party such as a CPA or consultant. There is a fourth alternative, an accounting system which has never been reviewed by any independent party (government or otherwise). In this case, a contractor (or a potential contractor) may have an accounting system awaiting its first test, so to speak.

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Topics: Compliant Accounting Infrastructure, Cost and Pricing and Budgeting, Small Business Compliance, Contracts Administration, Government Compliance Training

Immigration and Naturalization Homeland Security Management Alert

Although Redstone Government Consulting. Inc., makes every attempt to avoid blogs which are overtly political, we’ve taken note of a DHS OIG (Department of Homeland Security Office of Inspector General) “Management Alert” which coincidentally provides some indirect validation to the Executive Order which suspends US refugee intake for 120 days, and places a 90-day moratorium on citizens of seven countries (entering the United States).   As we all endure the divisive rhetoric directed at the Executive Order, it may or may not be coincidental that there has been no media mention of the DHS OIG Management Alert, dated January 19, 2017.

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Topics: Redstone GCI, Defense Contractors, Government Compliance Training

The First Annual Redstone Edge Conference

On September 22, 2016, approximately 150 professionals attended the first annual “Redstone Edge” conference.  The all-day event, held at the Jackson Center in Huntsville, Alabama, is planned to be an annual event, potentially expanding to two days in September 2017 (starting on September 21, 2017).  

The 2016 conference covered a broad range of topics with an impressive variety of presenters representing government agencies, government contractors, and related advisors, including attorneys and consultants/CPAs.

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Topics: Redstone GCI, Government Compliance Training

Do as I say, not as I do! DCAA’s Internal Control Failure.

DFARS 252.242-7006(c)(8) specifically requires management reviews or internal audits of the system to ensure compliance with the contractor’s established policies, procedures.

One of the first things a DCAA auditor looks at when auditing a contractor’s accounting system is its policies and procedures. Policies and procedures represent control activities that are essential for an adequate system of internal controls. Good policies and procedures help ensure consistent operations in accordance with management objectives. DCAA cites policy and procedure inadequacies or the failure to comply with policies and procedures in virtually every deficiency report it issues related to internal controls.

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Topics: Government Compliance Training, DCAA Audit Support