COMPLIANCE UPDATE: New DCAA audit program for accounting system audits under DFARS 252.242-7006.

New DCAA audit program for accounting system audits under DFARS 252.242 7006

New DCAA audit program for accounting system audits under DFARS 252.242 7006

The Department of Defense (DOD) implemented a new DCAA audit program dictating new requirements for contractor’s accounting systems. This new dcaa audit program appears to be a mix of prior accounting system subsystem audit programs (e.g., billing, labor, direct and indirect costs, etc.), the SF 1408 and the 18 specific DFARS criteria. The compensation system, (one of the six subsystems), is not fully addressed in this new audit program Also of note, the DCAA will use the 18 DFARS criteria as their audit baseline notwithstanding the absence in contracts of the applicable.

To date, the government hasn’t published necessary requirements or limits for accounting systems to secure contracts. This is the first time they have officially listed requirements for adequate accounting systems and penalties for falling short. What is left is for DCAA auditors to interpret these requirements because DOD left a lot open to interpretation. The actual requirements for an ‘adequate system’ were not thoroughly defined.

This new clause also has a direct effect on cost reimbursement, incentive type, time and materials and labor hour contracts.

For more details connect with: www.dcaa.mil

Need more information or help with compliance- Contact us

Scroll to Top