Risk & Compliance
Find the weak spots before an auditor, a regulator or a loss does. Risk assessments, internal control reviews, outsourced internal audit and practical policies your team will actually follow.
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Government Contracts & DCAA Compliance Advisory
A cost-type contract, a pre-award accounting system review or an overdue incurred cost submission has put DCAA compliance on your agenda. We help government contractors build accounting practices that meet federal requirements, calculate indirect rates that can be supported, and prepare for a DCAA audit with confidence.
30 minutes · $199 · written summary included
What DCAA compliance means for your business
The Defense Contract Audit Agency audits contractors on behalf of the Department of Defense and other agencies. Its focus is whether costs charged to the government are allowable, allocable and reasonable under FAR Part 31 and the contract terms. Cost-reimbursement and time-and-materials contracts bring the most scrutiny.
Northern Virginia and the Washington DC area have one of the largest concentrations of government contractors in the country. Many are small or growing firms winning their first cost-type work. They need an accounting system that segregates direct and indirect costs, records time accurately and keeps unallowable costs out of billings.
Who it’s for
- Small and mid-sized government contractors in Northern Virginia and the DC area
- Contractors pursuing their first cost-reimbursement or T&M contract
- Firms facing a pre-award accounting system survey
- Contractors with incurred cost submissions due or overdue
- Companies preparing for, or responding to, a DCAA audit
What’s included
- Contract compliance review of cost and billing provisions
- Accounting-system readiness against DCAA and DFARS criteria, including timekeeping
- Chart of accounts and cost pool structure for direct and indirect costs
- Indirect-cost analysis: fringe, overhead and G&A rates, and provisional billing rates
- Identification and segregation of unallowable costs
- Incurred cost submission preparation support
- DCAA audit preparation: document readiness, walkthrough rehearsal and response support
Preparing for a DCAA audit
A DCAA audit can cover your accounting system, your proposal, your billing, your incurred costs or your timekeeping. Each type asks different questions. We review the audit notice and scope with you, check that policies and records support your answers, and help you prepare clear explanations. Your team responds to the auditors; we support the process.
Incurred cost submissions
Contractors with flexibly priced contracts must file an incurred cost submission, generally within six months after the end of the fiscal year. The submission supports final indirect rates and ties claimed costs to the general ledger and to each contract. Late or inadequate submissions can delay billing adjustments and contract closeout. We help assemble the schedules, reconcile them to the books and review them before you submit.
How it works
How it works
Understand
We review your contracts, current system and any DCAA correspondence.
Assess
We compare your practices to the requirements and list the gaps.
Build
Policies, cost pools, timekeeping and rate models your team can maintain.
Prepare
Incurred cost schedules and audit readiness reviews before deadlines.
Support
Ongoing help as contracts, rates and requirements change.
Why Atlantic Assurance & Advisory
We bring a CPA’s view of cost accounting and internal control to government contracting. Our work is documented and practical, so your staff can maintain it after we finish. We explain requirements in plain English and focus on what matters for your contract types.
Many contractors also need internal control and compliance support or an agreed-upon procedures engagement to satisfy a specific contract requirement.
FAQ
Frequently asked questions
Do all government contractors need a DCAA-compliant accounting system?
Not all. It matters most for cost-reimbursement contracts and certain time-and-materials work, where the government pays based on your costs. Many firm-fixed-price contracts carry fewer accounting system requirements. Read your contract clauses and solicitations, and if you plan to bid on cost-type work, put the system in place before award, because a pre-award review can come quickly.
What does a DCAA-ready accounting system look like?
It separates direct and indirect costs, tracks costs by contract, records employee time daily against the right charge codes, keeps unallowable costs out of billings and rates, and produces reliable reports for billing and incurred cost submissions. Written policies and consistent practice matter as much as the software. We assess your setup against these expectations and help close the gaps.
When is the incurred cost submission due?
Generally within six months after your fiscal year ends, under the allowable cost and payment clause in your flexibly priced contracts. Extensions need approval from the contracting officer. Late or incomplete submissions can delay final rate settlement and contract closeout, so we suggest starting the reconciliation work soon after year end.
What are unallowable costs?
Costs the FAR or your contract say cannot be charged to the government, such as entertainment, most alcohol, certain lobbying costs, and fines and penalties. They must be identified in your books and excluded from billings and indirect rates. Setting up separate accounts for them is one of the simplest and most effective steps toward DCAA compliance.
Can you represent us in a DCAA audit?
We help you prepare and support you throughout: reviewing the audit scope, checking that records support your positions, rehearsing walkthroughs and helping draft responses. Your company remains responsible for its submissions and communications with the government, and your team speaks with the auditors with us at your side.
Talk to us about DCAA compliance
In a 30-minute consultation we will review your contract types, your current accounting setup and what DCAA is likely to look at.
30 minutes · $199 · written summary included
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