Tag Archives | DCAA

Proposed DFARS Business Systems Compliance Rule – Dead on Arrival

The proposed DFARS Business Systems Compliance Rule DFARS Case 2012-D042 has been closed. It’s an interim rule that never made it to final. Surprised? Read on! The July 22, 2014 ruling was conceived in response to a Government Accountability Office Report (GAO-12-83) issued November 3, 2011, which recommended “the Secretary of Defense work with DCMA […]

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Apathy and the Business Systems Rule

DOD proposed a major change to the Business Systems Rule (and GovCon compliance in general) and it has received very little industry attention. A proposed change to the Defense FAR supplement published in the Federal Register on July 15th would make some government contractors responsible for audits of their own accounting, estimating and material management […]

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Budgeting and Forward Pricing Rates

For many companies, this time of the year is the beginning of budget season. Budgeting is one of the primary tools used in financial planning and tracking, and it sets forth a reasonable expectation of what a company anticipates spending and making in the coming year or years. The process also allows companies to develop […]

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A New Twist on the Business Systems Rule

DOD has relieved DCAA of yet another of its responsibilities and put the burden squarely on government contractors. A proposed change to the Defense FAR supplement published in the Federal Register July 15th, would make government contractors responsible for audits of their own accounting, estimating and material accounting systems, including engaging and paying a CPA […]

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Notifying DCAA of a Change in Location

Did your accounting department, and with it, all of the accounting records, move to a new office recently? Did you notify DCAA of your move? Based on advice given by a speaker at a recent seminar, you may just be okay if you didn’t. During the presentation, it was stated there is no established policy […]

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Qualified Opinions Rising on DCAA Audits

The DCAA released a Memorandum for Regional Directors on Audit Alert on Access to Contractor Employees discussing how it is imperative to have access to contractor employees by way of interviews and observation through the different stages of an audit. This access is required to fulfill the requirement of Generally Accepted Government Auditing Standards (GAGAS) for […]

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Audit Evidence of Consultant Fees

On Thursday, December 19, 2013 the DCAA issued a Memorandum for Regional Directors (MRD) related to Professional and Consultant Service Costs (FAR 31.205-33) and Purchased Labor.  FAR 31.205-33(f) contains three documentation requirements mandatory for an allowable determination of consultant service costs. The documentation is as follows: • An agreement that explains what the consultant will be […]

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The New Excessive Pass-Through Cost Principle

Due to a new FAR provision effective January 2011, and new audit guidance from DCAA, indirect costs and fees or profit associated with subcontracts may be unallowable when the total subcontracted content of a contract or individual delivery order exceeds 70 percent of the total cost.  Contractors should be able to demonstrate their “added-value” efforts, […]

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Indirect Costs – Overhead or G&A?

In any company, it is important to differentiate between your direct and indirect costs.  The government contracting industry is no exception.  While direct costs are more straightforward, it can be difficult to decide how to classify your indirect costs.  Unlike direct costs, indirect costs are all costs that are unable to be attributed to a […]

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