According to the online DCAA News, “To comply with the regulations regarding proper financial management, government contractors must satisfy the Defense Contract Audit Agency (DCAA), which is responsible for performing all audits for the DoD (Department of Defense), and for providing accounting and financial advisory services to DoD components responsible for procurement and contract administration.”
DCAA News continues to state, “DCAA also provides contract audit services for many other government agencies as. The Federal Acquisition Regulations (FAR), are a series of regulations issued by the Federal Government that concern the requirements of contractors for selling to the government, the terms under which the government obtains ownership, title and control of the goods or services purchased, and rules on specifications, payments and conduct and actions regarding solicitation of bids and payment of invoices.”
As you can imagine, the DCAA guidelines are strict. In fact, the regulations are now even tougher for government contractors because they are based on a rigid pass/fail grading system. For this reason, it is even more important that your business is ready for its DCAA audit.
What are some of the things you should know about DCAA audits? The DCAA has an Audit Process Overview. Here are some of the things this process looks at:
- Accounting System Requirements
- Contract Briefs
- Incurred Cost Submissions
- Monitoring Subcontracts
- Proposal Adequacy
- Provisional Billing Rates
- Public Vouchers
- Real-time Labor Evaluations
Prior to your DCAA audit, it is wise to schedule an entrance conference with the auditors. This way, you will be better able to understand the purpose and overall plan for the audit. You will also be able to agree on the scope of the audit during this meeting. Make sure you include managers whose departments are impacted by the DCAA audit, so they are aware of all of the audit’s implications.
As long as you have established an accurate, accessible recordkeeping system, your company should have few issues with a DCAA audit. But, you do not want to leave your DCAA compliance to chance. It is best to have a partner on your team who knows what the DCAA expects and can help your business be ready in the event of a DCAA audit.
At Techeon, we have years of experience working with DCAA compliance. With our expertise in setting up your books, timekeeping, payroll, expense, and invoicing systems, we can help you reduce any issues that may occur if you are subject to a DCAA audit.
For more information about how Techeon can help you be prepared, contact us at (602) 421-1453.