DCAA Compliant Timekeeping Checklist
Timekeeping continues to be a hot item for key government contract regulators including DCAA Compliance. Adequate timekeeping practices are crucial to successfully securing or maintaining an adequate government contract accounting system. Often deficient timekeeping is the reason for contractors’ failing DCAA accounting system audits. Below the key requirements for compliant timekeeping systems and practices. Electronic timekeeping systems are acceptable provided the key requirements are followed.
The timekeeping system or procedures must be documented in a timekeeping policy or procedure provided to all employees. All of the key elements of an adequate time keeping system must be addressed.
Every employee must record their time daily. Recording time in advance or days after the fact such as at the end of the week is not acceptable.
Time must be charged by day and by project and/or indirect accounts.
Employees must record all time worked on projects to the proper job numbers and codes.
Employees must record all indirect time not identifiable to a given project to proper indirect cost accounts.
Employees must record all vacation, sick, holiday and other leave time to the proper accounts.
Employees must account for all hours worked.All. project names or job codes that appear in the system should be initiated by finance or the system administrator. Project names or codes must be provided to employees authorized to work on a given project.
All time charges must be the employee’s own. All time must be recorded properly based on work completed, irrespective of whether the time is billable or recoverable. Under no circumstance may personnel work on one project and record time to a different project. Under no circumstance may personnel work on indirect tasks and record time as direct costs to a project or vice versa.
Corrections to time entries should only be made by the employee. Corrections are approved by the employee’s supervisor. Under unusual circumstances where the employee cannot make the changes to time sheets then accounting or the administrator may make such changes with the employee’s consent. This exception only applies in rare situations.
All employee time must be approved by the employee’s supervisor.
All employees should be provided at least annual documented time keeping training awareness whether by formal or informal means.
Time sheets and all corrections must be maintained for a period of at least 2 years. However, project records under a government contract must be maintained for audit purposes for a period of three years after final payment. The requirements for record retention are contained in FAR Subpart 4.7.
Periodic monitoring of compliance with time keeping requirements should be conducted by audit or floor checks.