Surviving a DCAA Audit
If you have a contract with the Department of Defense, you'll need to have an audit from the Defense Contract Audit Agency, also known as the DCAA. The DCAA audit ensures that the government isn't overbilled by you and that you're following the terms of the contract correctly. Preparing for this audit is a time-consuming process and if this is your first DCAA audit, you should contact an accountant and lawyer who have experience in dealing with government contracts.
Here is how you get started with the audit process to ensure that the audit will run smoothly and fairly. First you need to have an entrance meeting with the auditor and his lawyer. Second, you'll need to appoint a liaison who will handle the organization and transferring of necessary documents to be given to the auditor. After this you must meet with your staff to discuss the upcoming audit and which procedures and financial records will be audited. Tell the staff that they must comply with the auditor's wishes and also mention which things are not to be audited based on the agreement between you and the auditor. Make sure your liaison attends all interviews that pertain to the audit.
If you disagree with the DCAA audit's findings, you'll have the opportunity to respond to the DCAA regarding these findings. You want to prepare evidence for your claims carefully and you should identify the specific individuals who audited your company and the issues they found in the audit. The audit supervisor is the person you would contact to dispute the findings but sometimes you can contact the branch manager of a DCAA field office in your area and get a reevaluation.
If you need additional information on how the audit process works, you can visit the DCAA's website and read the Audit Contract Manual. This manual will give details on how you would be audited, what will be audited, how performance is measured before carrying out a CPSR, how you can respond to the audit and what you should do if problems were found regarding how you managed the contract.
Before you prepare documents for the audit, or the incurred cost submission, you should hire an accountant to help you go over your company's financial records and operations as these are important in the audit. The accountant should have years of experience in handling business owners who hold contracts with the government and who understands current laws regarding government contracts.
The accountant must also use DCAA-compliant accountant software and time-tracking software programs. This is important because you could have errors on your audit if the accounting methods you use are not approved by the DCAA.
Here is how you get started with the audit process to ensure that the audit will run smoothly and fairly. First you need to have an entrance meeting with the auditor and his lawyer. Second, you'll need to appoint a liaison who will handle the organization and transferring of necessary documents to be given to the auditor. After this you must meet with your staff to discuss the upcoming audit and which procedures and financial records will be audited. Tell the staff that they must comply with the auditor's wishes and also mention which things are not to be audited based on the agreement between you and the auditor. Make sure your liaison attends all interviews that pertain to the audit.
If you disagree with the DCAA audit's findings, you'll have the opportunity to respond to the DCAA regarding these findings. You want to prepare evidence for your claims carefully and you should identify the specific individuals who audited your company and the issues they found in the audit. The audit supervisor is the person you would contact to dispute the findings but sometimes you can contact the branch manager of a DCAA field office in your area and get a reevaluation.
If you need additional information on how the audit process works, you can visit the DCAA's website and read the Audit Contract Manual. This manual will give details on how you would be audited, what will be audited, how performance is measured before carrying out a CPSR, how you can respond to the audit and what you should do if problems were found regarding how you managed the contract.
Before you prepare documents for the audit, or the incurred cost submission, you should hire an accountant to help you go over your company's financial records and operations as these are important in the audit. The accountant should have years of experience in handling business owners who hold contracts with the government and who understands current laws regarding government contracts.
The accountant must also use DCAA-compliant accountant software and time-tracking software programs. This is important because you could have errors on your audit if the accounting methods you use are not approved by the DCAA.
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