The Defense Contract Audit Agency reviews US Department of Defense (DoD) contracts with “cost-plus” or other cost reimbursement provisions. The DCAA audits the contractor's project accounting systems and their compliance with cost accounting standards and guidelines. At any time, the DCAA can audit the contractor's internal control systems, including timekeeping and cost reporting. DCAA compliance guidelines are also used as the standard for monitoring and auditing all government contracts and service providers.
Download a White Paper on Cost Accounting and Tenrox DCAA Compliance
Streamlining DCAA Compliance with Tenrox
Contractors with the right tools, policies and procedures can substantially simplify DCAA compliance. Tenrox Project Workforce Management helps contractors:
- Implement comprehensive time and expense tracking controls
- Allocate indirect costs appropriately to multiple contracts
- Respond to auditors' requests quickly
- Eliminate manual processes and gain efficient, consistent tracking of time and expenses
- Maximize revenue by minimizing disallowed or disputed charges
- Demonstrate robust administration and reporting (which DCAA considers a key deliverable of every DoD contract)
| DCAA Requirements: |
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| DCAA Compliance: General |
| Access to data must be controlled |
Windows NT authentication and role-based security that complies with DCAA requirements for format, history, aging, and lockout after multiple failed login attempts |
| To substantiate costs, sufficient records must be retained three years after the final contract billing |
All data is stored in a central and secure database. Internal auditors can generate real-time reports on all government contracts and overhead costs |
| Time and expense process includes a verifiable audit process for all changes and transaction entries |
Audit of all approvals, changes, entry deletions/creations; audit reports |
| DCAA Compliance: Time |
| Every employee must record their own time charges |
Users login using NT authentication or secure passwords. |
| Time charges must be recorded daily |
Timesheets can be locked for previous days; system requires a note entered by the user to change any past entries |
| Changes to time entries require an explanation by the employee and management's approval |
Any change creates an audit event. Users and managers can be required to provide explanations for any modifications or corrections |
| If the resource is shared, the resource time charges should be split across multiple projects |
Split billing |
DCAA Compliance: Costs |
Identify direct project costs versus overhead costs |
Define types of expenses; and identify which ones are billable expenses. With appropriate controls/note enforcements, allow billable flag override on a per entry basis |
A verifiable process for identifying why an incurred expense is a direct cost |
Approval process for expense reporting and money charge entries |
Download a White Paper on Cost Accounting and Tenrox DCAA Compliance
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