If the desire is to be a successful government
contractor, then numerous federal regulations and rules should be followed. In
contracting industry, the most widely used term is DCAA compliant accounting. It
helps reduces problems arising in an audit and allows to be better prepared for
it. For instance, having in place proper business system enables tracking
direct/indirect, accounting, billing and labor costs.
Audit types
Dcaa
Accounting System Requirement has different audits numbers in place. It includes special audits,
forward pricing audits, etc. It is necessary for contractors to ensure evaluation
is done to ensure complying with prevailing rules and regulations. Before
awarding contracts, there is carried out forward pricing audits. Evaluation
done it based on the amount the contractor is likely to charge for goods and
services provided to the government.
·
Special audits: It is generally requested by the
contracting officers. It is performed either after or before awarding of the
contract. Contracting offices seek independent financial opinion of accounting
business system of the contractor. Such audits are of top priority.
·
Incurred cost audits: It evaluates course representation accuracy
and is carried out after awarding a contract. To understand contractor’s
accounting system, there is carried out pre-award survey audits. It helps
determine if contractor is to be awarded the contract or not.
Non-compliance and consequences
faced
DCAA rules as well as SF
1408 regulations should be adhered by all contractors. In case of
violations, consequences will have to be faced. It generally includes
disbarment or contract termination. The former is fairly serious. This might
mean barring of future proposals or bids by contractors. Also, can be faced
criminal and civil penalties.
Compliance
To avoid unwanted consequences and to achieve
success, it will be essential to follow the set rules and regulations. This is
best done by taking help of the industry experts.
