Are You Taking The DCAA Timekeeping Compliance Requirements Seriously?
DCAA Compliance NewsAugust 9, 2021
Are you following the DCAA requirements for timekeeping compliance? Federal timekeeping policies are contained in the Federal Acquisition Regulation.
Establishing accurate timekeeping allows for a clear, detailed audit trail and will enable easier DCAA compliance. As a federal contractor you must establish acceptable timekeeping procedures and a reporting system that allows you to track daily labor costs on a project basis. The government wants to make sure taxpayer funds awarded to contractors are being applied efficiently, without waste or fraud, and that careless accounting of labor is avoided.
As we explain to all Kline & Company clients:
- An approved accounting system is an essential requirement before a Government Cost Reimbursable Contract can be awarded. An Adequate Time Keeping System is one of the primary cost elements of a compliant accounting system that will be reviewed by DCAA for adequacy before and after contract award.
- Compliant timekeeping systems utilized by Government Contractors are required to demonstrate accurate labor distribution to both general ledger control accounts and to related Government Contract tasks. This is an essential requirement for both the accounting and billing systems.
- Deficiencies noted by DCAA in the labor reporting, accounting, or billing systems may cause unnecessary delays in the award of Government Contracts or the inability to award subject contracts. Deficiencies found after award can result in delays in processing public vouchers or disapproval of a contractor’s entire Billing System.
Accurate timekeeping starts with the right culture about tracking time, so that the company reports time properly and measures all aspects of your government contracts, as well as managing project costs!
Timekeeping is always a hot button for DCAA Auditors. Compliance is non-negotiable as stringent guidelines must be followed! There is a learning curve involved in getting all employees up to speed! Here are a few basic tips to help ensure that you are following best practices:
- Adequate timekeeping policy in place and signed by all employees
- All employees must record their time each day, in ink, or use an electronic system
- Employee maintains control of their own timesheet
- All vacation, sick, holiday, and other leave time must be recorded accurately
- All employee time worked must be recorded and approved by their supervisor
- Timekeeping training must be conducted annually
- Proper project names and job codes must be included in employee timekeeping
- Testing accuracy of timekeeping procedures and controls regularly
There are many adequate electronic timekeeping solutions on the market today. One of the software products we like is Tsheets, now known as QuickBooks Time since being acquired by Intuit. Many of our clients use Quickbooks Time for tracking and allocating employee time. This software can help you ensure that you are compliant with the federal government’s requirements.
Contact us if you have any questions.