“Without Dynamics SL
and Synergy, we would be struggling with government
compliance. They make it
so much easier!”
and Synergy, we would be struggling with government
compliance. They make it
so much easier!”
– Former VP / Controller,
Government Contractor
Government Contractor
“With Dynamics SL, we’re now capable of meeting the proper accounting and reporting requirements of the
Department of Energy…”
Department of Energy…”
– Julie Adelman, Controller,
NuScale Power
NuScale Power
What the Government Requires – DCAA Compliant Accounting Software
Overview | Government Requirements | System Requirements | How Synergy and SL Help
It’s important for government contractors to understand government compliance and be confident their accounting system is able to effectively handle the requirements before entering into a contract. You need government and DCAA compliant accounting software. It’s not the software, per se, but how it’s configured and the processes you set up, that drives compliance.
Here’s what you need to know…
For DCAA Compliant Accounting Software – Government Contracts:
- Are subject to GAAP and the Federal Acquisition Regulations (FAR)—a really big book.
- Are generally not awarded until a contractor passes a pre-award accounting system survey (Standard Form 1408).
- Must meet four requirements (401, 402, 405, and 406) of the Cost Accounting Standards (CAS)—a slightly smaller book—if between $7.5M and $50M (modified coverage). The threshold drops to $650K during the performance of a single “trigger” contract greater than $7.5M.
- Are subject to all 19 requirements of the CAS if over $50M (full coverage) or a number of smaller CAS-covered contracts that total $50M.
- Requirements flow down to the subcontractor(s).
- When subject to CAS, require a CAS Disclosure Statement, which must validate a company’s accounting system.
- Must have all direct or indirect costs consistently allocated to a contract to be accepted.
Your Government and DCAA Compliant Accounting Software System:
- Only reflects your potential for compliance. How it is implemented and the procedures employed are more important than brand. Deploy a system that handles both effective compliance procedures AND your business model.
- Needs to cost-effectively handle all types of contracts and government requirements and enable you or an auditor to prove costs were determined using appropriate and consistent techniques.
- Must pass this test: Pre-Award Accounting System Survey (Standard Form 1408) and, if subject to CAS, requires a CAS Disclosure Statement.
Risks:
- If you don’t have a good system to estimate costs—particularly a consistent method of allocating indirect costs—you can lose money on a contract.
- If an auditor finds errors that favor your company, you can be fined.
- Non compliance can result in lost current and future contracts.
7 Major Elements to a Government Compliant Accounting System
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NEXT STEP | DOWNLOAD:
WHITE PAPER: 4 Essentials to Becoming a Successful Government Contractor