Common challenges to DCAA compliance
Accurate Timekeeping
Employee time must be tracked accurately and in real time. Timesheets must be reviewed and verified by supervisors regularly. Any delays or inaccuracies can result in discrepancies, which will be flagged during an audit.
Cost Allocation Issues
The DCAA has stringent rules on cost allocation between direct and indirect categories and most accounting systems are not designed to handle the detailed cost allocation required by DCAA. Moreover, regulations and contract requirements may change, which require on-going adjustments to cost allocation practices.
Proper Documentation
Government contractors are required to maintain detailed record keeping and documentation that is organized and readily accessible for audits. The sheer volume of records that needs to be tracked and organized is overwhelming, especially for small businesses.
System Integration
Incompatible systems can result in discrepancies between timekeeping and payroll data, which can result in compliance issues.
