Dcaa compliance is a mandate thing for the contractors to pass through the process of securing and managing a government contract. And for this compliance the key areas to be covered by the contractors are the SF 1408 adherence and scrupulous readiness of incurred cost submissions or ICS. To talk about the Dcaa compliance, it lays the foundation for the government contractors. Securing any government contract is not easy and one has to pass the test of scrutiny of DCAA audits. This has indeed necessitated the contractors to be ready with a strong and reliable accounting system that is in accordance to the regulations laid down by FAR. And this Dcaa compliance is far beyond than just following the regulation. And it is also about following a set up were maintaining transparency and accountability along with fiscal responsibility becomes important.
SF 1408 or Pre-Award of Perspective Contractor Accounting system plays an important role as it functions as a crucial document in the pre-award phase of the contract. This enables the auditors to check for the adequacy of the accounting system. This contains briefings on the internal controls, organizational setup, procedures, and policies. For crossing the evaluation process, it is important for the contractor to understand the SF 1408 criterion and employ a complaint accounting system. Under this, the areas of scrutiny include:
• Policies and procedures that are instrumented for keeping records on timekeeping processes, subcontractor management, and cost allocation.
• Internal controls to ensure reliable and precise reporting of the finances happen by identifying and eliminating the frauds and errors.
• Organizational structure to display the hierarchy that is followed for an effective management of finances.
Contractors fulfilling the SF 1408 requirements become eligible for the federal contracts.
The next to talk about is the incurred cost submissions for post-award phase. This is explained as a yearly report that documents the costs incurred during the contract’s execution. This is helpful in combining the estimated cost with the actual cost incurred in the contract project. To understand the ICS in details, the following is to be studied:
• Meeting deadlines: the contractor must submit this report within the span of six months of the fiscal year closure. And late submissions get accounted for penalties and jeopardizing the contractor’s eligibility for securing future contracts.
• Documentation: the contractor should follow sincere records of costs that can be claimed in submissions, and also be prepared for the auditors’ scrutiny on details submitted.
• Preciseness: the ICS must carry exact details of the costs so that they can be judged as reasonable, allowable, allocable as per federal accounting fundamentals.
So, these all areas are to be made really straight and clear by the contractor to win the legal contract. This way the contractors come in a position to win the auditor’s confidence that they can manage the contract well. For a third-party company’s assistance, you can contact DCAA Consulting. Their experts answer all your questions at their website.