DCAA Compliance Resources and Guidance
Essential reference materials from DCAA on accounting system compliance for small business federal government contractors
DCAA provides information and guidance for small business government contractors on its website, www.dcaa.mil. There you can find information on accounting system requirements, Incurred Cost Submissions, audit processes, and more to help contractors satisfy the requirements imposed by the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS). Here are some key resources small business government contractors should be familiar with.
Accounting Compliance Resources
SF1408 is the government form that details the criteria for an adequate accounting system for federal contracting. These criteria are used to evaluate a contractor’s accounting system design prior to the award of a contract that requires an "adequate accounting system" pursuant to FAR 16.301.
DCAA provides this checklist for contractors to document how their accounting system satisfies the criteria on SF1408 ahead of a pre-award accounting system review.
The DCAA publication Information for Contractors provides companies that are new to government contracting a wealth of information on what to expect when doing business with the Federal Government and interacting with DCAA auditors.
DCAA’s Pre-award Survey Checklist (used by the contractor ahead of DCAA’s review) includes the question "Have you read the DCAA publication DCAAM 7641.90 – "Information for Contractors" on DCAA’s website. That should tell you how important it is for new contractors to be familiar with the information contained in this publication.
- Enclosure 1 provides background information about DCAA.
- Enclosure 2 provides information on Preaward Surveys of Prospective Contractor Accounting Systems, including what is expected of the accounting system, timekeeping policies and procedures, and penalties for labor mischarging.
- Enclosure 3 provides information on contractor pricing proposals.
- Enclosure 4 includes an explanation on the applicability of Cost Accounting Standards (CAS).
- Enclosure 5 details contract financing and interim and final vouchers
- Enclosure 6 addresses incurred cost proposal submissions.
This audit program documents the steps a DCAA auditor will take in evaluating the design effectiveness of a contractor’s accounting system for a Preaward Survey.
DCAA publishes a number of presentation slide decks with high level information on important topics for small business government contractors. Topics covered include Accounting System Requirements, Incurred Cost Submissions, Provisional Billing Rates, and Real-time Labor Evaluations, among others.
The Contract Audit Manual is a DCAA publication that details the auditing policies and procedures for personnel engaged in contract audits. The current version is available on DCAA’s website.
DCAA’s Checklist for Determining Adequacy of Contractor Incurred Cost Proposal is used to determine if a contractor’s incurred cost submission is complete and accurate. Contractors can use this checklist ahead of submitting their incurred cost proposal to ensure it includes all required schedules and meets the requirements under FAR 52.216-7.
Learn how to comply with on demand training
If you're new to government contract accounting, there is a lot to learn.
ICAT Systems offers an online, on-demand training program, Cost Accounting for Government Contractors, to help you navigate the requirements. This in-depth course addresses the fundamentals of government contract cost accounting and DCAA accounting system compliance, provisional billing rates, and final indirect cost rate proposals (Incurred Cost Proposals).
Using these source materials from DCAA along with sample data, this CPE-eligible course explains:
- What is required by the relevant FAR and DFARS requirements and audit programs
- How to satisfy these requirements, illustrated using examples and sample data
- What to expect from Government auditors in their review of these systems and processes
Participants gain skills to successfully navigate Government oversight of contract cost accounting and billing of contract costs.