DCAA Timekeeping

Your company modernized operations by implementing electronic timekeeping, eliminating paper timesheets and streamlining payroll processing. Employees swipe badges, managers approve time electronically, and your payroll integrates seamlessly with your accounting system. Then DCAA auditors questioned whether your electronic system actually meets government contract timekeeping requirements under FAR 31.201-4 and discovered your clock-in system tracks attendance…

DCAA defines adequate internal controls as your ability to ensure costs charged to government contracts are accurate, allocable, and allowable under FAR Part 31 cost principles. Your controller might have 20 years of public accounting experience, but if your system allows unallowable costs to flow into government contract cost pools, you fail the adequacy test….

If your business is pursuing or currently holds government contracts, you’ve likely encountered the term “DCAA compliant accounting systems.” Understanding and implementing these systems isn’t just a regulatory checkbox—it’s essential for maintaining contract eligibility, ensuring accurate billing, and protecting your business from costly audit findings. At Hour Timesheet, we work closely with government contractors every…

A mid-Atlantic defense contractor faced $19.8 million in questioned costs after DCAA auditors discovered systematic violations of executive compensation limitations during their 2024 incurred cost audit. The contractor’s failure to properly calculate and segregate executive compensation exceeding the statutory $671,000 ceiling for fiscal year 2025 resulted in automatic unallowable cost penalties, contract modification requirements across…

A major systems integrator discovered the devastating compounding effect of unallowable cost penalties when DCAA auditors imposed $14.3 million in additional charges beyond the initial $8.7 million in disallowed costs during their fiscal year 2024 audit. The contractor’s inclusion of unallowable entertainment expenses, excessive compensation costs, and lobbying expenditures in their cost pools triggered the…

A Fortune 500 defense contractor faced $38.4 million in disallowed indirect costs after DCAA auditors rejected their overhead rate proposal for inadequate supporting documentation during fiscal year 2024 negotiations. The contractor’s failure to provide acceptable cost pool segregation evidence, proper allocation base justification, and compliant organizational realignment documentation resulted in a 47% reduction in proposed…