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2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
2013-06-13 Government Contractors Project Management Systems
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2013-06-13 Government Contractors Project Management Systems

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Government Contractos are under pressure to allocate resources more effectively, increase client billing rates, and differentiate themselves through innovative service delivery in order to generate …

Government Contractos are under pressure to allocate resources more effectively, increase client billing rates, and differentiate themselves through innovative service delivery in order to generate greater profit margins in the face of ever-increasing competition and regulatory DCAA compliance. Accounting for every detail of a project or contract, including measuring the degree of project completion, remains a huge challenge for Government Contractors. Join Raffa & BDO to learn how you can solve your accounting, project management, and compliance issues with an effective Microsoft Dynamics solution.​

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  • 1. Thrive. Grow. Achieve.Seth Zarny – Raffa PartnerKellye Jennings – BDO PartnerGlenn Anstead – Raffa Senior ManagerJune 12, 2013Government ContractorsFinancial & ProjectManagement SystemsSeminar
  • 2. AGENDA2• Introductions – BDO, Raffa, & Audience• Accounting Challenges for Govt Contractors• Typical Govt Contracting AccountingRequirements• Accounting System Overview– On-demand Financial & Project Reporting– Project Management & Job Summary Reports– Earned Value Management• DCAA Time and Expense Reporting• Provisional & Indirect Cost Analysis
  • 3. WHO IS RAFFA?3Microsoft Gold Competency ERP Partner with officesin Washington, DC and Rockville, MDSpecializing in Project Management & Accounting(PMA) solutions for Professional Services, NGO’s,Government Contractors, and Other Project DrivenOrganizations260 management, accounting, and systemsprofessionals
  • 4. DO YOU NEED THE NEWSOFTWARE?HINT – SOMETIMES YOU NEED TO CHANGE YOUR SOFTWARE!4
  • 5. OUR SOLUTION5• Project Management and Accounting from MicrosoftDynamics– An integrated suite of 9 modules that providefinancial accounting, project management andresource management capabilities– Key features include: time and expensemanagement, billing, revenue recognition, costallocations, contract management, payroll reporting,employee and resource utilization, and real-timeproject profitability analysis– Integration with Microsoft Project combines real-time financial data with best-of-breed projectplanning, task scheduling, knowledge management,and skills management capabilities
  • 6. OUR CUSTOMERS6• Business Services, Consulting, IT and ComputerServices, Engineering, Government Contractors,Public Relations / Lobbying, and Construction• All size companies in the mid-market spectrum –typically $5-500M revenue & 25-1000 employees• Project-centric divisions and departments in largeenterprise
  • 7. CRITICAL REQUIREMENTSFOR SUCCESS…7
  • 8. CRITICAL REQUIREMENTSFOR SUCCESSWHAT TO LOOK FOR WHEN REVIEWINGINTEGRATED SOLUTIONS?Out of the Box, Proven Financial and OperationalSoftware•Proven management of Indirect and Direct Costs•Integrated across Finance and Project Management /Operations•Business Process Automation•Setup Flexibility to meet business needs8
  • 9. BUSINESS PROCESSIMPROVEMENTSINDIRECT RATES• Monitor Trends via Management Reporter• More Accurate Cost Information for Bidding• More Accurate Historical Procurement CostsTRACEABILITY OF SOURCE DOCUMENTS• Management Reporting Drill Down• On line Inquiry Screens• Transaction Level Detail• Imaging/Document Management9
  • 10. BENEFITS FOR GOV’TCONTRACTORSCONTRACTORS LOOK FOR SOLUTIONS THAT CANMANAGE MULTIPLE CONTRACTS AND COSTPOOLS. NEED TO SEPARATE INDIRECT COSTSFOR REPORTING PURPOSES• Time and Materials• Fixed Firm Price• Cost PlusINTEGRATED TIME AND EXPENSE TO FINANCIALSWEB BASED ACCESS FOR REMOTE EMPLOYEESEARNED VALUE MANAGEMENT CAPABILITIES10
  • 11. MIXED COMMERCIAL &GOV’T REQUIREMENTSWHAT IS KEY FOR COMPANIES DOING BOTHCOMMERCIAL AND GOVERNMENT CONTRACTING?•Consistent Accounting Practices for BothBusinesses•Allocations must be the same•Overhead, G&A, and Unallowable pools11
  • 12. OPERATIONAL BENEFITSWHAT BENEFITS SHOULD OPERATIONS & PROJECTMANAGERS RECEIVE FROM MICROSOFTDYNAMICS?•Superior Cost Control•Real time visibility into committed costs•Immediate access to supporting documentationvia document imaging•Earned Value Management visibility12
  • 13. THE DCAA AUDITHOW DOES MICROSOFT DYNAMICS STACK UPDURING THE AUDIT?• Successfully completed years of DCAAaudits• Provides timely access to information• Reduces the time required by internal staffduring the audit process13
  • 14. MICROSOFT INTEGRATEDSOLUTIONS• Dynamics ERP• SharePoint14
  • 15. WHAT IS MICROSOFTDYNAMICS?• INTEGRATED FINANCIAL ANDOPERATIONAL/PROJECT MANAGEMENTSOFTWARE• FAMILIAR TO YOUR EMPLOYEES• GOVERNMENT CONTRACTING INDUSTRIES:• Professional Services• Contracting• Manufacturing• Distribution• ACCEPTED BY DCAA15
  • 16. FUNCTIONALITY PROVIDEDBY DYNAMICS•FINANCIALS•ACCOUNTING•FRINGE, OVERHEAD AND G&A RATE CALCULATIONS• Cost Segregation – Allowable vs. Unallowable•JOB COSTING•PURCHASING & REQUISITION MGMT•MANUFACTURING•INVENTORY MANAGEMENT•SALES ORDERS•SERVICE MANAGEMENT•CUSTOMER RELATIONSHIP MANAGEMENT16
  • 17. MICROSOFT SHAREPOINTWHAT IS MICROSOFT SHAREPOINT?A FOUNDATION FOR CONNECTED INFORMATION• Team Collaboration• Dashboard• Key Performance Indicators• Dynamics Business Portal• Integrated with Project Server17
  • 18. WHAT WILL YOU GET FROMTHE INTEGRATED SOLUTION?ORGANIZED FLOW OF INFORMATION• Project Management• Resource Allocation• Financial ReportingSEAMLESS INTEGRATION OF INFORMATIONONE VIEW OF THE DATATOOLS YOUR TEAM IS FAMILIAR WITH…18
  • 19. PROJECT MANAGERSUPPORT19• WEB ACCESS TO YOUR DATA• Immediate access to Projects profitability• Maintain projects• Assign resources to projects, tasks or subtasks• Create initial and subsequent budgets• Set maximums for Projects and Tasks• Store and share Project invoices in a documentrepository• Enter time remotely supporting your companiesneeds: bi-weekly, semi monthly…
  • 20. REPORTING VS.DASHBOARDSMany people use the terms interchangeablyWhat is the purpose of a report in GovernmentContracting company?• Compliance• Company DirectedWhat is the purpose of a dashboard?• Drive user towards decisionHow do you know what the Dashboards should be?• Key Performance Issues of CompanyWhat are KPI’s?• Key Performance Indicator20
  • 21. DYNAMICS SL OVERVIEWPROJECT DASHBOARD21• Real-timevisibilityinto yourdata• ProjectP&L• Laborhoursstatistics
  • 22. 22DYNAMICS SL OVERVIEW -CREATE NEW PROJECT
  • 23. 23DYNAMICS SL OVERVIEW -CREATE NEW PROJECT
  • 24. DYNAMICS SL OVERVIEW -ASSIGN RESOURCES24
  • 25. 25
  • 26. 26Benefits Beyond TheNormTraditionalProject Management• On time versus originalschedule estimate• Within budget versusoriginal cost estimate• Within scope versus originaldeliverables• Meet or exceedcustomer expectations• “Best available” resourceutilizationProject Management& AccountingReduced time to marketand/or cycle timeProject revenue, cost,and profitabilityBusiness value ofservices deliveredAlignment withbusiness and clientobjectives“Best fit” skills-basedresource optimization
  • 27. 27Other MeasurableBenefits• Better Prioritization of Projects and ServicesIt is shocking how many “projects” operate below the radarscreen with no plans, controls or accountability• Shorten Billing CyclesBetter allocation of resource T&E to project schedules andinvoicing, and faster resolution of billing disputes• Minimize Revenue LeakageEliminate errors from manual entry or redundant systems usedto invoice client services• Improved Service AgilityQuicker response to sudden or unexpected changes inbusiness priorities, competitive pressures, new technology,and economic downturns
  • 28. 28Bringing it All TogetherA SINGLE VIEW OF OPERATIONAL DATA• Discover the one truth for your business• Provide people access and empower themwith simple but sophisticated tools• Focus on what is important and act!• Institute the command and control you needto meet goals
  • 29. DYNAMICS SL OVERVIEWExec Mgmt DashboardsReal-time visibilityinto your dataTop 10 CustomersYear over yearSales and Margin29
  • 30. DYNAMICS OVERVIEWIncreased VisibilityReal-time visibilityinto your dataLabor statistics byCustomer30
  • 31. DYNAMICS OVERVIEWWeb based TimecardsOnline Timesheets31
  • 32. DYNAMICS OVERVIEWProject VisibilityOnline Projectvisibility – multiplelevels…32
  • 33. DYNAMICS OVERVIEWProject VisibilityOnline Projectvisibility – multiplelevels…Commitments &Budgets33
  • 34. DYNAMICS OVERVIEWSelf Service AccessOnline Projectvisibility – multiplelevels…Self-service –Project profitability34
  • 35. DYNAMICS OVERVIEWAbility to drill into the detailsOnline Projectvisibility – multiplelevels…Self-service – Drillinto the supportingdetails35
  • 36. WEB BASED EE EXPENSE REPORT36
  • 37. DYNAMICS RATE TABLE SETUP37
  • 38. DYNAMICS CLOSING AT ACTUAL38
  • 39. PROVISIONAL VS. PTD ACTUALREPORTING39
  • 40. PROVISIONAL VS. YTD ACTUAL40
  • 41. STATEMENT OF INDIRECT EXPENSE41
  • 42. PROJECT – GL RECONCILIATION REPORT42
  • 43. JOB SUMMARY REPORT43
  • 44. EMPLOYEE LABOR DISTRIBUTION44
  • 45. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.GOVERNMENT CONTRACTS FINANCIAL &PROJECT MANAGEMENT SEMINARKELLYE JENNINGS, PARTNER, AUDIT – KJENNINGS@BDO.COM
  • 46. AGENDA• THE REGULATORY ENVIRONMENT• BUSINESS SYSTEMS• TIME AND EXPENSE CHALLENGES AND REQUIREMENTS• JOB COSTING• Definition and allocation of direct and indirect costs• Allocation bases• How rates are calculated
  • 47. AGENDA (CONTINUED)• OTHER ISSUES• Provisional versus actual rates• Types of government contracts• Government audits• QUESTIONS?
  • 48. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.SECTION 1 – THE REGULATORY ENVIRONMENT
  • 49. THE REGULATORY ENVIRONMENTHEAVILY REGULATED:• Many potential pitfalls for the naïve or unwary seller• Compliance costs (personnel, systems, procedures) require up front investmentFEDERAL ACQUISITION REGULATION (FAR):• Covers all aspects of contracting for the Federal Government• Includes “Cost Principles” and many other administrative proceduresAGENCY SUPPLEMENTS (E.G., DFARS):• Provide additional Agency-specific guidanceCOST ACCOUNTING STANDARDS (CAS):• Provide guidance on acceptable cost accounting practices
  • 50. THE REGULATORY ENVIRONMENTKEY REGULATORY COMPLIANCE ISSUES INCLUDE:• Identification and Segregation of “Unallowable” Costs:o As discussed further below, Government contractors are required to identify, segregate, and excludecertain types of costs from proposals, billings, and claims.o “Flexibly priced” contracts may require certification of proposed indirect cost rates.• Government Property Control Requirements:o Contractors are required to identify, track and maintain Government Property, including items acquired inperformance of a contract.o Lost, damaged, stolen or destroyed property must be promptly reported.o Periodically, inventories of Government Property must be performed and submitted to Governmentcustomers.
  • 51. (FAR) FEDERAL ACQUISITION REGULATION VS.(CAS) COST ACCOUNTING STANDARDSFAR COST PRINCIPLES DETERMINE ALLOWABLE COSTSCOST ACCOUNTING STANDARDS GOVERN COST ACCOUNTING PRACTICES USEDFORGOVERNMENT CONTRACTS:• MEASUREMENT OF COSTS• ASSIGNMENT OF COSTS TO COST ACCOUNTING PERIODS• ALLOCATION OF COSTS
  • 52. WHAT IS “FAR”?THE FEDERAL ACQUISITION REGULATION (FAR) IS THEPRINCIPAL SET OF RULES IN THEFEDERAL ACQUISITION REGULATION SYSTEM. THIS SYSTEMCONSISTS OF SETS OFREGULATIONS ISSUED BY AGENCIES OF THE FEDERALGOVERNMENT OF THE UNITED STATESTO GOVERN WHAT IS CALLED THE "ACQUISITION PROCESS,"WHICH IS THE PROCESS THROUGHWHICH THE GOVERNMENT PURCHASES ("ACQUIRES") GOODSAND SERVICES. THAT PROCESSCONSISTS OF THREE PHASES:(1) NEED RECOGNITION AND ACQUISITION PLANNING,(2) CONTRACT FORMATION, AND(3) CONTRACT ADMINISTRATIONTHE FAR SYSTEM REGULATES THE ACTIVITIES OFGOVERNMENT PERSONNEL IN CARRYINGOUT THAT PROCESS. IT DOES NOT REGULATE THEPURCHASING ACTIVITIES OF PRIVATE SECTORFIRMS, EXCEPT TO THE EXTENT THAT PARTS OF IT AREINCORPORATED INTO GOVERNMENTSOLICITATIONS AND CONTRACTS BY REFERENCE.
  • 53. PURPOSE OF “FAR”THE PURPOSE OF THE FAR IS TO PROVIDE "UNIFORM POLICIES AND PROCEDURESFORACQUISITION." FAR 1.101. AMONG ITS GUIDING PRINCIPLES IS TO HAVE ANACQUISITIONSYSTEM THAT(1) SATISFIES CUSTOMERS NEEDS IN TERMS OF COST, QUALITY, AND TIMELINESS;(2) MINIMIZE ADMINISTRATIVE OPERATING COSTS;(3) CONDUCT BUSINESS WITH INTEGRITY, FAIRNESS, AND OPENNESS; AND(4) FULFILL OTHER PUBLIC POLICY OBJECTIVES. FAR 1.102(B).THE FAR ALSO INCLUDES SOCIOECONOMIC REQUIREMENTS, SUCH AS REQUIRINGCERTAINITEMS TO BE PURCHASED FROM THE UNITED STATES FIRMS ONLY AND THATLARGEORGANIZATIONS TO USE SMALLER BUSINESSES AS SUBCONTRACTORS.
  • 54. WHAT IS “CAS”?The Cost Accounting Standards (CAS) are methodologies and techniquesused toguide and consistently measure the cost accounting practices amongstgovernment contractors.The Cost Accounting Standards Board (CASB) consists of members from theOffice of Management and Budget (OMB), Department of Defense (DOD),General Services Administration (GSA), and private sector.To promote consistency across agencies, the Cost Accounting Standards whichaddress the assignment of costs to government contracts are different fromthe ‘Cost Principles’ which provide guidance for cost allowability. Some ofthe principles are based upon certain cost accounting standards and shouldbe referenced to determine if a cost is unallowable. Cost accounting can becategorized into the following three areas:(1) measurement of cost (market vs. present value),(2) cost accounting period assignment (accrual vs. cash basis), and(3) allocation of costs (direct vs. indirect)
  • 55. PURPOSE OF “CAS”The purpose of the CAS is to ensure your cost accounting practices as a contractor are fairlystandard, practical, yet flexible across the industry, while remaining consistent with yourdisclosed practices, procedures, and policies for cost recovery:(1) CAS should be considered during the design and configuration of your financial systems,(2) CAS directly affect compliance(3) CAS have a direct impact on your ability to recover costsYour disclosed (submitted statement, if applicable) cost accounting policies andpractices must also be adequate and compliant and should be the basis for youraccounting and financial system design
  • 56. COMPLIANCE IS YOUR FRIENDGOVERNMENT CONTRACTING INDUSTRY IS HEAVILY REGULATED• Many potential pitfalls for the naïve or unwary seller• Compliance costs (personnel, systems, procedures) require up front investmentFEDERAL ACQUISITION REGULATION (FAR)• COVERS ALL ASPECTS OF CONTRACTING FOR THE FEDERAL GOVERNMENT• INCLUDES “COST PRINCIPLES” AND MANY OTHER ADMINISTRATIVE PROCEDURESAGENCY SUPPLEMENTS (E.G., DEFENSE FEDERAL ACQUISITION REGULATION SUPPLEMENT - DFARS)• PROVIDE ADDITIONAL AGENCY-SPECIFIC GUIDANCECOST ACCOUNTING STANDARDS (CAS)• PROVIDE GUIDANCE ON ACCEPTABLE COST ACCOUNTING PRACTICESCOMPLIANCE GENERALLY LEADS TO A COMPETITIVE ADVANTAGE. NONCOMPLIANCEMAY LEAD TO IMPOSITION OF PENALTIES, SUSPENSION, DEBARMENT, AND NO AWARD
  • 57. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.SECTION 2 - BUSINESS SYSTEMS
  • 58. BUSINESS SYSTEMS RULESIMPLY STATED… THE CONTRACTOR SHALL ESTABLISH AND MAINTAINACCEPTABLEBUSINESS SYSTEMS…• Establishes criteria for mandatory adherence of requirementsspecifically related to a contractors business systems to ensure bestpractices are maintained for all government contracts.• Criteria reflects a combination of existing requirements as found inCAS, FAR, DFARS, and those historically enforced by DCAA, DCMA,cognizant audit agency, etc.• Identifies the relevant business systems, corresponding guidelines andcompliance requirements.
  • 59. BUSINESS SYSTEMS RULE (CONT.)• Provides for mandatory financial penalties for anynoncompliance that is deemed a “significant deficiency”• Allows for discretion (as exercised by government auditagency and reviewers) in how compliance will be achieved;final determination resides with ACO, CO directs withholdingdecision• Defines grace period for implementing corrective action planto rectify deficiencies
  • 60. ACCEPTABLE / DEFICIENT“DEFICIENCY” IS DEFINED AS ASHORTCOMING IN THE CONTRACTORSBUSINESSSYSTEM(S) THAT MATERIALLY AFFECTSTHEABILITY OF OFFICIALS OF THEDEPARTMENT OFDEFENSE TO RELY UPON INFORMATIONPRODUCED BY THE SYSTEM THAT ISNEEDEDFOR MANAGEMENT PURPOSES.“ACCEPTABLE CONTRACTOR BUSINESSSYSTEMS” ARE CONTRACTOR BUSINESSSYSTEMS WHICH ARE FOUND TO BE INCOMPLIANCE WITH RELEVANT LAWS ANDREGULATIONS [COST ACCOUNTINGSTANDARDS (CAS) CLAUSES AND FEDERALACQUISITION REGULATIONS (FAR)PRINCIPLES] AS REVIEWED BY YOURCOGNIZANT AUDIT AGENCY.
  • 61. WHAT HAPPENS IF FOUND“DEFICIENT”?You must respond in writing to your Contracting Officer (CO) within 30 days of receiving yourdetermination of identified business systems deficiencies to include your comments –rationalefor disagreement CO may issue a notice of intent to Contractor to withhold amounts frominterim billings not to exceed:• 5% for one or more identified significant deficiencies in any single business system• 10% significant deficiencies in multiple business systems
  • 62. WHAT HAPPENS IF FOUND “DEFICIENT”? (CONT.)If you correct the deficiencies or submit an acceptable corrective action plan(one that includes milestones and steps taken to eliminate issues) within 45days of notice of intent to withhold, and as verified by the cognizant auditagency (auditor), the CO may:• Decrease the withholding percentage until such time all deficiencies have beencorrected and verified• Discontinue withholding and release previously withheld amounts (if not related toother system deficiencies) and verified by auditor• If no determination of the corrective action plan by the CO has been made within 90days, withholding could be reduced by 50%, but not release payment for previouswithholdingsIf the corrective plan is not followed and the deficiencies continue to exist, theCO may:• Increase the withholding percentage if the corrective action plan is not followed anddeficiencies continue to exist
  • 63. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.SECTION 3 – TIME AND EXPENSES
  • 64. OBJECTIVES OF TIMEKEEPING SYSTEM• Ensure that proper and reliable contract labor costs, identified as either direct orindirect, are:–Accumulated–Reported–Billed• Billings to the government via a system of accurate, timely, and complete posting oflabor hours on individual employee timecards
  • 65. T&E SYSTEM BEST PRACTICES• Employee understanding of procedures for preparing time sheets/cards/entering time, andpreparing expense reports• Employee independence in preparing and correcting time sheet/expense report and adequatemanagement review and submission to accounting• Adequate written policy and procedures that employees and management must follow• Traceability of changes• System for detecting errors/required changes
  • 66. T&E SYSTEM BEST PRACTICES(CONTINUED)•Proper coding of expenses to corresponding accounts.•Inclusion of sufficient business purpose on expense reports.–A business purpose of “miscellaneous reimbursement” is not adequate and does not providetransparency into the nature of the expense.•Detail regarding number of attendees for meal expenses on expense reports(dependent on Company policy)•Itemized receipts for expenses relating to meals (dependent on Company policy)
  • 67. BASIC REQUIREMENTS OF TIMEKEEPINGSYSTEM• Employee is given or mapped to correct project or charge number via work authorization before work commences• Time cards/sheets or access to system provided to employee at beginning of pay period• Time cards/sheets are pre-coded with pay period, name, etc., if manual• Employee has control or possession of timesheet (if manual) or sole access to electronic system• Employees record time daily• Supervisors or other personnel do not prepare timesheet entries for employees (unless out due to sickness, etc.)
  • 68. BASIC REQUIREMENTS OF TIMEKEEPINGSYSTEM (CONTINUED)• Audit trail for changes made to initial timekeeping entries• Management approval of timesheet corrections noted• Explanation of timesheet corrections provided• Timesheet signed by employee at end of pay period• Paid absences charged to correct indirect code• Indirect duties (training, meetings, etc.) properly charged• Timesheets collected by appropriate official and reviewed and approved
  • 69. WHAT DCAA OBSERVATIONS WILLELEVATE AUDIT RISK?• Mix of cost plus government & commercial contracts• Lack of written or inadequate t&e procedures• Significant adjusting entries to G/L labor charges• Data indicated on timesheet during floor check does not match time sheet after entered to labor distribution• Significant and non-verifiable changes and alterations to employee timesheets• Timesheets without employee signature• Inadequate demonstration of employee training for preparing time sheets
  • 70. HOW DO I KNOW IF I HAVE TIMEKEEPINGSYSTEM PROBLEMS?• Timekeeping procedure is twelve years old and has not been updated to reflect current electronicmethods• At end of payroll period, electronic time entries for several employees are changed & then“approved” by supervisor• John Doe provides Lisa Smith, another employee (not his supervisor) his timekeeping password sothat Lisa can prepare entries for him while John is in rehab• Jane Doe, an “exempt” G&A person, often works uncompensated OT, but does not record more than40 hrs/week• Company cannot reconcile total payroll to labor distribution
  • 71. TIME REPORTING• All time worked should be reported, including all time worked in excess of thestandard workweek. This includes all time worked for clients, whether billable ornot.• All time and expenses associated with an individual contract should be recorded ina Work Breakdown Structure (WBS) element. Any time or expense related to theexecution of a specific contract should be charged to the correct WBS elements,regardless of whether or not those time and expenses can be billed. All other timeand expenses should be charged to the appropriate WBS element.
  • 72. LABOR SYSTEM AUTHORIZATION/APPROVALS• The contractor should have procedures to ensure the segregation of duties for workauthorizations and/or job assignments to the extent practical. Workauthorizations/job assignments should be controlled and issued by individualsindependent of those responsible for performing the work - a critical control is theprocedure used to open and close work authorizations.• The contractor should have procedures for the preparation of labordocumentation/work descriptions that require clear identification of the nature ofthe work performed - trackable to intermediate or final cost objectives• The contractor should establish a labor charging awareness program to train allemployees, as appropriate, on proper labor charging practices.
  • 73. LABOR SYSTEM AUTHORIZATION/APPROVALS CONT.• The contractor should assure that labor hours are accurately recorded and that anycorrections to time keeping records are documented including the appropriateauthorizations and approvals.• The contractor should assure the proper allocation of labor costs to cost objectives.• The contractor should provide reasonable assurance that labor transfers oradjustments of the labor distribution are documented and approved.• The contractor should monitor the overall integrity of the time keeping system.
  • 74. OVERTIME APPROVAL• Requests for overtime should be made by project managers or departmentmanagers. Overtime must only be authorized when a project or department managerhas documented the following in writing:–Overtime is necessary to meet delivery requirements,–Overtime is necessary to meet performance requirements, or–Overtime is necessary to make up for delays beyond the controlor without the fault or negligence of the contractor• When required by contract provisions, the project manager authorizing overtimemust obtain the contracting officers written approval.
  • 75. TIMECARD CHANGES / MODIFICATIONS• It is improper for supervisors to unilaterally make changes to an employee’stimecard. Doing so may result in disciplinary action.• If a time correction is necessary PRIOR TO submitting the time sheet to the PayrollDepartment, the employee should ensure that the time sheet correction is made inink and initialed. The reason should be clearly documented and approved by asupervisor.• When making a correction(s) to reported time SUBSEQUENT TO submitting the timesheet to the Payroll Department:–The correction may not be more than 30 days old.–Employees must indicate the reason for the correction, the jobnumbers affected by the adjustment, and the related hours.–The documentation for the labor corrections must be signed by asupervisor and submitted to accounting.–Consider creating a “Labor Correction Form” that will state thenecessary procedures for making labor corrections.
  • 76. DISTRIBUTION OF LABOR COSTS AND LABORTRANSFERS• Written justification is required for any transfer of labor costs to ensure the properallocation of labor costs to each project. Each justification should be retained inaccordance with the contractor’s record retention policy. Journal vouchers arecommonly used to document labor transfers.• The contractor should consider additional procedures for more closely scrutinizingtransfers.• The contractor should include procedures to address management review andapproval of labor transfers, labor distribution edit errors, and review and correctionof labor errors.• Labor distribution edit errors should be processed in a suspense account and billedto customers only after correction.
  • 77. CONSEQUENCES FOR DELIBERATE FAILURE TOFOLLOW TIMEKEEPING POLICIES AND PROCEDURES• The contractor should be committed to the enforcement of all timekeepingprocedures. Any clear infraction of the policy stated above will result in disciplinaryaction which may include a warning, reprimand, probation, suspension, reduction insalary, demotion, or dismissal.• Employees should be aware, in addition to company imposed sanctions, thatindividuals directly responsible for deliberate mischarging of time or materials maybe held personally liable for civil penalties and actual damages sustained by thegovernment as a result of the mischarging. Criminal prosecution may also resultwhich carries fines and/or imprisonment.
  • 78. CONSEQUENCES FOR DELIBERATE FAILURE TOFOLLOW TIMEKEEPING POLICIES AND PROCEDURESCONT.• Employees must be vigilant in their efforts to accurately record time. The penaltiesfor knowingly mischarging time can be as severe as termination and otherGovernmental ramifications (i.e., False Claims Act).• The contractor should periodically conduct floor checks to ensure timekeepingpractices are being followed and actual hours worked are accurately recorded.
  • 79. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.SECTION 4 – JOB COSTING
  • 80. JOB COST ACCOUNTING SYSTEMS• USED TO DETERMINE COST OF A PRODUCT OR SERVICE• CAN BE USED TO DETERMINE PRICES – GOVERNMENTCONTRACT PRICES ARE OFTEN BASED ON COSTSCHARGED TO A JOB• USED TO RECORD COST OF AN INDIVIDUALTRANSACTION• MAY BE USED TO DISTRIBUTE INDIRECT COSTS TO COSTOBJECTIVES• Government does not require “on book” distributions• “Memo records” are acceptable• Facilitates integration of production data into accountingrecords
  • 81. JOB COST ACCOUNTING SYSTEMS(CONTINUED)• Costs must be accumulated under general ledger controlo Job costs must be reconcilable and posted to general ledgercontrol accountso Costs must be posted at least monthly to books of account• Costs must be segregated between direct and indirecttypeso Controls must exist to preclude direct charging of indirectexpenses• Direct costs must be accumulated by contracto Must either have a subsidiary job cost ledger or accountsreceivable ledgero Must be able to “drill down” to at least Contract Line ItemNumber (“CLIN”) level• Indirect costs must be allocated to jobso Accumulated in logical cost groupings and allocated basedon causal or beneficial relationships
  • 82. ALLOCATION OF EXPENSESWHEN A COMPANY INCURS AN EXPENSE, IT IS EITHER A DIRECT EXPENSE THAT IS CHARGED TOA SPECIFIC PROJECT OR IT IS AN INDIRECT EXPENSE THAT BENEFITS VARIOUS PROJECTS ANDTHE COMPANY AS A WHOLE.
  • 83. ACCOUNTING FOR UNALLOWABLE COSTSAn allowable cost in government contracting terms means billable –it’s allowable if the rules permit it to be included in an invoice to thegovernment. An unallowable cost is just the opposite; it’s the kind ofcost you can’t bill the government for.Under the FAR 31.201-2, a cost is allowable only when it meets all ofthese requirements:Terms of the contractLimitations set for the in FAR 31.201Reasonable and allocable
  • 84. WHAT IS A DIRECT COST?IF A COST IS EASILY IDENTIFIED WITH A SINGLE PROJECT, IT IS GENERALLYCONSIDERED A DIRECT COST.To help make this determination, ask…“If we did not have this contract, would we still incur this cost?”A “no” answer to this question indicates that it is probably adirect cost.
  • 85. DIRECT COSTS EXAMPLES• Labor performed while working on a project• Travel to project status meetings• Material consumed entirely on a project• Subcontractors/consultants hired to workon a project.
  • 86. WHAT IS AN INDIRECT COST?AN INDIRECT COST IS A COST INCURRED THAT:• Benefits more than one contract• Incurred for the common good of the company• Impractical to split• Immaterial direct cost
  • 87. DEFINING INDIRECT COSTSFRINGE BENEFITSCOMPANY EXPENSES INCURRED FOR THE BENEFIT OF ITS EMPLOYEES• Employer payroll taxes• Medical insurance paid by the company• Company 401(k) contributions• Paid time off
  • 88. DEFINING INDIRECT COSTSOVERHEADCOSTS NOT DIRECTLY RELATED TO COST OBJECTIVES BUT ARESUPPORT-TYPE COSTS NECESSARY FOR THE PRODUCTION OFGOODS OR SERVICES• Salaries and wages of support and production personnel• Facilities cost• SuppliesIt is common to find separate overhead pools for engineering,manufacturing, and for certain off-site activities
  • 89. DEFINING INDIRECT COSTSG&ACOSTS ASSOCIATED WITH THE GENERAL ADMINISTRATION ANDOVERALL MANAGEMENT OF A COMPANY• Compensation of company executives and related fringe• Legal and professional fees• Administrative personnel and costs• Business insurance• Company taxes (except federal income taxes)• Bid and proposal costs
  • 90. DEFINING INDIRECT COSTSSUBCONTRACTOR/MATERIAL HANDLINGCOSTS ASSOCIATED WITH OVERALL ADMINISTRATION OFSUBCONTRACTOR AND MATERIALS ACQUISITIONS• Selecting, negotiating, and managing subcontractors and materials purchases
  • 91. DIRECT OR INDIRECT – GRAY AREASEXAMPLE: COMPANY A AND B SHIP MONTHLY PROGRAM REPORTS TO THEIR CLIENTSCompany A• Charges the shipping expenseagainst the contract• Support personnel chargetime to overheadCompany B• Charges all shipping to overhead• Administrative staff charge:o Time supporting projectso Overhead when working onsupport of a general natureThe same approach can be taken on many other types ofexpenses, such as photocopies, phone calls, faxes, etc.
  • 92. G&A OR OVERHEADCOMPANY A CHARGES HR COSTS TO G&AWHILE COMPANY B ALLOCATES THE COSTOF HR ACROSS THE ENTIRE COMPANY.HR BENEFITS THE COMPANY AS A WHOLE,MEETING THE CRITERIA OF A G&A COST,BUT HR ALSO BENEFITS ALL EE’S OF THECOMPANY.COMPANY B RATIONAL:• The fundamental costs of the majorityof ee’s are maintained in OH• HR costs will be allocated between OH& G&A based on a method such asusing proportionate number of ee’sCan certain G&A costs qualify as OH expenses?Deciding to allocate costs betweenG&A and OH takes detailed planningand consideration of materiality andcost /benefit relationship
  • 93. DEFINING ALLOCATION BASESASSIGNING AN INDIRECT COST POOL TO A PARTICULAR ALLOCATIONBASE DEPENDS UPON:• TYPES OF COSTS INCLUDED IN THE POOL• WHETHER THE BASE PROVIDES A REASONABLEREPRESENTATION OF THE RELATIVE CONSUMPTION OF POOLEDINDIRECT COSTS BY DIRECT COST ACTIVITIESLabor costs are an appropriate allocation base for the fringe expenses.There is a clear relationship between the two.
  • 94. INDIRECT RATESINDIRECT RATES ARE EQUITABLE, LOGICALAND CONSISTENT PROCESS FORALLOCATING COSTS NOT DIRECTLYASSOCIATED WITH A SINGLE PROJECT ORCOST OBJECTIVE.THE ONLY REQUIREMENT OF THE FAR ISTHAT THE ALLOCATION OF INDIRECT COSTSBE:• FAIR• REASONABLE• EQUITABLE
  • 95. INDIRECT RATESKEY POINTS TO ESTABLISH AND MANAGE INDIRECT COST STRUCTURES:FISCAL YEARTHE PERIOD FOR ALLOCATING INDIRECT COSTS IS ACONTRACTOR’S FISCAL YEAR – IT IS NOT RELATED TO A PERIODOF PERFORMANCE FOR A GIVEN CONTRACTS.SIMPLICITYWHEN SUBSTANTIALLY THE SAME RESULT CAN BE ACHIEVEDTHROUGH LESS PRECISE METHODS, A COMPANY IS PERMITTEDTO KEEP THE ALLOCATION SIMPLE AND NOT BE FORCED INTOMORE COMPLICATED ALLOCATION FORMULAS THAT ARETECHNICALLY MORE ACCURATE BUT NOT MATERIALLYDIFFERENT.CONSISTENCYONCE TREATED AS A DIRECT (OR INDIRECT COST), A COSTSHOULD BE TREATED CONSISTENTLY.Companies have a great deal oflatitude to determine indirect ratestructure
  • 96. CALCULATION OF INDIRECT RATESINDIRECT RATE =Similar cost (pool)Allocation baseThe calculation of indirect rates issimple math – it is just a matter ofgrouping, adding, and dividing.It’s how and why certain numbersare grouped together that can becomplex.
  • 97. INDIRECT RATES
  • 98. INDIRECT RATES
  • 99. INDIRECT RATESMETHODS PRACTICED TO REDUCE INDIRECT RATES:• CHARGE AS MANY COSTS DIRECT AS POSSIBLE. BY CHARGING SHIPPING ANDCOPYING DIRECTLY TO A CONTRACT, IT WILL KEEP IT OUT OF OVERHEAD POOL,WHICH WILL IN TURN REDUCE THE OVERHEAD RATE.• DIRECT CHARGE UNIQUE COSTS TO A SPECIFIC CONTRACT• MORE INDIRECT RATES BY SPLITTING LARGE GROUPINGS• INDIRECT RATES FOR DIFFERENT TYPES OF WORK• ESTABLISH A SERVICES CENTERA company with high rates may not really be any more expensive -- though theyare often perceived that way. When developing or evaluating indirect rates, acompany should keep in mind ways to reduce at least the appearance of indirectrates.
  • 100. INDIRECT COST ALLOCATION CYCLEINDIRECT COST ALLOCATION TYPICALLY FOLLOWS THE CYCLE DEPICTED IN THEFOLLOWING FIGURE:ForwardPricingEstimateIndirect ContractCostsFinalAllocationAllocate IndirectCosts toContractsBillingProgressPayments CostReimbursement
  • 101. INDIRECT COST ALLOCATION CYCLEFORWARD PRICING- DURING THIS PHASE, THE CONTRACTOR PROPOSES FORWARDPRICING RATES AND USES THOSE RATES IN CONTRACT PROPOSAL PRICING.CONTRACT BILLING- PROVISIONAL / TARGET RATES ARE INDIRECT RATEPROJECTIONS USED ON CONTRACT BILLING THAT HAVE BEEN REVIEWED ANDAPPROVED BY THE DCAA OR THE CONTRACTOR’S COGNIZANT AGENCY FORPROPOSAL AND ESTIMATING PURPOSES.FOR EXAMPLE, A COMPANY MAY DEVELOP BUDGETED RATES FOR THECURRENT YEAR AND FORECASTED RATES FOR THE NEXT TWO YEARS. ALLTHREE YEARS OF RATES CAN BE APPROVED FOR PROPOSAL PREPARATIONPURPOSES.
  • 102. INDIRECT COST ALLOCATION CYCLEFINAL PRICING. AFTER THE COST ACCOUNTING PERIOD IS COMPLETED, CONTRACTORS CANCALCULATE ACTUAL INDIRECT COST RATES TO DETERMINE ACTUAL CONTRACT COST.• FOR CONTRACTS THAT REQUIRE FINAL PRICING (E.G. COST PLUS) THE RESPONSIBLECONTRACTING OFFICER OR AUDITOR MUST DETERMINE FINAL INDIRECT RATES FOR THECONTRACT.• FINAL INDIRECT RATE PROPOSAL IS SUBMITTED BY THE CONTRACTOR.• MONTHS OR YEARS MAY BE REQUIRED TO COMPLETE THIS PROCESS. UNDER CERTAINLIMITED CONDITIONS, THE CONTRACTING OFFICER AND THE CONTRACTOR MAY AGREETO USE ESTIMATED QUICK-CLOSEOUT INDIRECT COST RATES FOR FINAL PRICING.• DATA USED TO SUPPORT FINAL RATES WILL BECOME PART OF THE DATA AVAILABLE FORESTIMATING FORWARD PRICING AND BILLING RATES FOR SUBSEQUENT ACCOUNTINGPERIODS.
  • 103. GOVERNMENT CONTRACT LIFE-CYCLEPre-AwardAwardAccountingControls[Policies,Procedures,Training]AccountingSystem
  • 104. BDO USA, LLP, a Delaware limited liability partnership, is the U.S.member of BDO International Limited, a UK company limited byguarantee, and forms part of the international BDO network ofindependent member firms. BDO is the brand name for the BDOnetwork and for each of the BDO Member Firms.SECTION 5 – OTHER ISSUES
  • 105. ACTUAL VERSUS PROVISIONAL RATES• Provisional rates – estimated rates that are required to reimburse contractors on aninterim basis.o Sometimes referred to as “target rates.”o Should be adjusted as facts and circumstances change to prevent substantialunderpayments or overpayments.• Actual rates – final indirect rates that are determined during or after a contractor’s fiscalperiod.o Subject to audito Required to be submitted in the final indirect proposal within six months after year-endo Used in the contract close-out process
  • 106. BASIC TYPES OF GOVERNMENTCONTRACTS• Fixed price – contractor is paid a predetermined fixed amount for a specified scopeof work and has full responsibility for the performance costs.• T&M and labor hour – contractor is paid fixed hourly rates for direct-labor hoursexpended under specified labor categories. Materials and other non-labor costsare usually reimbursed at actual costs plus allocable indirect costs.• Cost reimbursement – contractor is reimbursed for allowable incurred costs plus afee (if specified).TIP: DO NOT MAKE YOUR ACCOUNTING SYSTEMS DECISION BASED ON THECONTRACT MIX THAT YOU HAVE TODAY.
  • 107. SCOPE OF GOVERNMENT AUDITS• PROPOSAL / PRE-AWARD• INCURRED COST• BUSINESS SYSTEMS• FORWARD PRICING/ESTIMATING• SPECIALo Termination proposalso Progress paymentso Financial capabilitieso Other claims• Other auditso CAS Complianceo Defective pricingo Other
  • 108. THE CURRENT AUDIT ENVIRONMENT• INCREASED OVERSIGHT ON CONTRACTOR BUSINESSSYSTEMS AND CONTROLS• STRINGENT RIGOR APPLIED TO AUDIT PRACTICES,PROGRAMS AND DOCUMENTATIONo Decreased cooperation with contractors to prevent appearanceof biaso “Zero tolerance” with respect to meeting control objectives.o Elimination of recommendations on deficiencieso Inadequate/adequate findings – no more “inadequate in part”• As a result, an increasing number of contractors now haveinadequate systems with “significant deficiencies” and“material weaknesses”• Most inadequacies have been accompanied withrecommendations to ACOs to pursue withhold of payments• ACOs face an up hill battle in disagreeing with auditor findings• Impacting contractors ability to win new awards and sub-awards
  • 109. THE CURRENT AUDIT ENVIRONMENT(CONTINUED)• THROUGH PERIODIC BUSINESS SYSTEMS AUDITS AND FLASH REPORTS –OPPORTUNITIES FOR INADEQUATE SYSTEMS ARE HIGHER.• SINCE THERE ARE NO LONGER “INADEQUATE IN PART” DETERMINATIONS, ASINGLE FINDING IS NOW A “SIGNIFICANT DEFICIENCY” REPRESENTING A“MATERIAL WEAKNESS.”• AS A RESULT, A SINGLE AUDIT FINDING CAN NOW RESULT IN ARECOMMENDATION OF WITHHOLD OF FEES/PAYMENTS.• SINCE THERE IS A BACKLOG OF AUDITS AND BECAUSE AUDITS > 4 YEARSOLD ARE NO LONGER CURRENT, THERE IS AN INCREASED NUMBER OFCONTRACTORS WITH UNAUDITED SYSTEMS.• DCAA IS WORKING ON REDUCING THE BACKLOG OF OPEN INCURRED COSTAUDITS.o Data is oldo Personnel may have changedo Systems may have changed• RESULTS IN INCREASED AUDIT SCRUTINY (E.G., SUBSTANTIVE TESTING) INALL OTHER AUDITS AND IMPACTS CONTRACTORS ABILITY TO OBTAIN NEWAWARDS
  • 110. DEALING WITH GOVERNMENT AUDITORS• UNDERSTANDING WHAT IS BEING AUDITEDo Pre-award – evaluation of whether the contractor is capableof performing the proposal.o Post-award – evaluation of accuracy, completeness, andcurrency of pricing data submitted.o Incurred costs – evaluation of whether direct and indirectcosts are properly claimed for reimbursement on flexibly-priced contracts.• Be preparedo Establish an audit liaisono Understand the programs that the auditor will be usingo Insist on an entrance and an exit conferenceo Be prompt in your responses• Understand that not all government auditors are the same.
  • 111. QUESTIONS?

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