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DCAA Compliance

WrkPlan was developed specifically for government contractors requiring DCAA compliance.

Should your organization require a “DCAA compliant accounting system” there are a few things to keep in mind.

The DCAA (Defense Contract Audit Agency) does not blanket approve specific software programs as officially “DCAA Compliant”. Though there are systems, such as WrkPlan, designed specifically to meet the DCAA’s requirements, your organization will have to operate that system properly and have the appropriate policies, procedures and internal controls in place in order to successfully pass a DCAA audit.

EXAMPLE DCAA AUDIT

  • PROPER SEGREGATION OF COSTS
  • FINANCIAL AND INDIRECT RATE REPORTING
  • INTEGRATED, WEB-BASED TIMESHEETS

The Pre-Award Survey of Prospective Contractor Accounting System is required of contractors seeking any Cost type contract award, such as Cost-Plus (CP) or Cost-Plus-Fixed-Fee (CPFF).

PRE-AWARD AUDIT

Prior to an award, the DCAA may assess whether your accounting system can manage costs under a government contract and generate the required information. While the DCAA does not endorse any specific accounting software; auditors have regularly assessed and approved contractors using the WrkPlan system.

EVALUATION CHECKLIST
MARK “X” IN THE APPROPRIATE COLUMN (Explain any deficiencies in SECTION | NARRATIVE) YES NO NOT
APPLICABLE
2. ACCOUNTING SYSTEM PROVIDES FOR:  
a. Proper segregation of direct costs from indirect costs.
b. Identification and accumulation of direct costs by contract.
c. A logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives. (A contract is final cost objective.)
d. Accumulation of costs under general ledger control
e. A timekeeping system that identifies employees' labor by intermediate or final cost objectives.
f. A labor distribution system that charges direct and indirect labor to the appropriate cost objectives.
g. Interim (at least monthly) determination of costs charged to a contract through routine posting of books of account.
h. Exclusion from costs charged to government contracts of amounts which are not allowable in terms of FAR 31, Contract Cost Principles and Procedures, or other contract provisions.
i. Identification of costs by contract line item and by units (as if each unit or line item were a separate contract) if required by the proposed contract.
j. Segregation of preproduction costs from production costs

The Standard Form the DCAA uses to conduct its survey of your accounting system is the SF1408: Pre-Award Survey of Prospective Contractor - Accounting System. The Standard Form the DCAA uses to conduct its survey of your accounting system is the SF1408: Pre-Award Survey of Prospective Contractor -Accounting System. It can be found here.

  • Proper segregation of direct costs from indirect costs.

    Yes; direct costs are allocated to specific Contracts, while costs incurred for one or more contracts are segregated into separate cost pools and collected in indirect accounts.

  • Identification and accumulation of direct costs by contract.

    Yes; WrkPlan collects cost by contract. It maintains a general ledger and cost ledger. The cost ledger identifies the project, element of cost (labor, ODC, material, subcontract, etc.).

  • A logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives. (A contract is final cost objective.)

    Yes; the system comes with indirect cost pools already setup. Creating custom pools for your business is easy, given WrkPlan’s flexibility.

  • Accumulation of costs under general ledger control

    Yes; WrkPlan is configured with three subledgers (A/P, A/R, and timekeeping) that feed the general ledger.

  • A timekeeping system that identifies employees' labor by intermediate or final cost objectives.

    Yes; WrkPlan has a fully-integrated, online Timesheet Portal that employees use to record their daily timesheets. Employees can only see and post hours to the charge codes (direct and indirect) that they have been assigned.

  • A labor distribution system that charges direct and indirect labor to the appropriate cost objectives.

    Yes; once employees’ hours have been approved, these records are posted directly to the appropriate ledgers as either direct or indirect.

  • Interim (at least monthly) determination of costs charged to a contract through routine posting of books of account.

    Yes; expenses are tracked in real-time. Once a transaction is created, it is updated throughout the system, enabling WrkPlan to generate interim reports to support contract/management requirements.

  • Exclusion from costs charged to government contracts of amounts which are not allowable in terms of FAR 31, Contract Cost Principles and Procedures, or other contract provisions.

    Yes; unallowable accounts are included in the chart of accounts that comes out-of-the-box. These can be customized to your business. You can also specify which accounts are to be excluded from your indirect rate calculations.

  • Identification of costs by contract line item and by units (as if each unit or line item were a separate contract) if required by the proposed contract.

    Yes; WrkPlan allows for line items and units to be setup under each contract. These can be customized based on the contract award to meet the specific requirements for identification of cost.

  • Segregation of preproduction costs from production costs

    Yes; WrkPlan allows for segregation of preproduction costs, such as B&P, from production costs. For example, these costs can be setup to be charged to separate cost ledgers.

Please note: WrkPlan is capable of being DCAA complaint, provided users properly configure and maintain a segregation of costs as well as other appropriate policies, procedures and internal controls. Responses above are for illustrative purposes only.

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