As a government contractor, your first face-to-face interaction with a DCAA auditor will likely be an Accounting Systems Adequacy Audit (Pre-award Survey). The audit does exactly what the title states. DCAA will be looking at your processes and systems to determine if your accounting systems, policies, and procedures are capable of resulting in compliant cost tracking and billing.
You should ask yourself these types of questions when preparing for an audit. If you are comfortable with your answers, then you are probably ready for an audit.
- Do my procedures and accounting records follow Generally Accepted Accounting Principles?
- Are my indirect costs segregated from my direct costs?
- Are my unallowable costs segregated from both direct and indirect costs?
- Is my timekeeping system set up in a manner that would pass an audit?
- Are my employees ready for a timesheet floorcheck audit?
- If I were to pull a sample of timecards, would the timecard, job cost summary, paycheck detail, and the billing invoice all agree?
- Am I following all guidelines as explained in the Joint Travel Regulations for direct travel?
- Are all employees following policies and procedures set by the company? It’s important to remember that company policies need to be followed as well as FAR regulations.
Audits are a fact of life when selling to the government. However, by insuring that you have compliant systems and processes in place before the audit, they don't have to stressful!