How to Keep Your Timesheets DCAA Compliant
The key to a successful DCAA floor check audit is an accurate and up-to-date timekeeping system. This includes the DCAA Pre-Award survey, which must be completed before you can be awarded a cost reimbursement contract. The survey assesses whether your accounting system can accurately track costs in accordance with contract terms. If you fail the survey, you will not be able to receive the contract.
Maintaining Job Code and labor category segregation compliance is crucial to passing any DCAA Pre-Award survey, and your timekeeping records are how you show that. In other words, proper timekeeping is essential to stay compliant with government regulations, avoid financial penalties, and improve your project’s bottom line. Below, we’ll present the regulations that will keep you in compliance.
Basic DCAA Timekeeping Requirements for GovCons
There are some basic rules and requirements for timekeeping as set by the DCAA. The rules themselves aren’t all that complicated or convoluted, but there are a number of them and it can be easy to lose track of whether or not you’re following them.
Here’s the basic list:
- You must charge every hour worked exactly to the corresponding charge code.
- Every day, every employee is responsible for logging their own time within the system. A manager cannot record an employee’s time unless the employee is unable to do so themselves (for example, if they are out sick or traveling for work).
- Employees can’t log their time before the job or task is actually performed.
- Each employee is only given one timecard or timesheet per work period. Most timekeeping is electronic, not paper.
- All time changes must be made in ink or in digital format and include the following: description of change, reason for change, initial time of change, and date/time of corrected change.
- Employees and their supervisors must each sign off on all timesheets in order to ensure their accuracy.
- For labor distribution reasons, timesheet records must include the employee’s name and both hours and minutes worked. Monthly labor distribution should be reconciled, making it critical to establish job codes in the tracking system.
It’s a good idea to keep a checklist of these basic rules and to regularly go through it and ensure that you’re in compliance. Messing up your timesheets can cause a massive headache in the case of a DCAA audit, including fines and disqualification from future contracts.
If You’re Not Using Electronic Timekeeping, Here Are Some Tips
Most GovCons are using electronic timekeeping systems these days, and those have their own set of additional rules. If you’re not yet transitioned to electronic timekeeping, here are some general rules for compliance.
Luckily, most of these rules are common sense and probably already covered by your timekeeping system, but it’s always good to double and triple check to be sure. Again, failing a DCAA audit because of timekeeping can be expensive on multiple levels.
Here are the rules for electronic timekeeping systems:
- To deter potential hacking, each employee must have a unique password which changes every six months.
- To prevent any accidental or unauthorized changes, employees are accountable for their timesheets and must keep control of them at all times.
- Employees are not permitted to work for hours that have not yet been compensated under the terms of the aforementioned legislation. They must track their hours on a daily basis, but they are not to do so in advance.
- A contractor’s system needs to have an audit trail function that documents all changes including the following:
- Time Changes
- Project Numbers and Charge Codes
- Project/Timesheet Approvals
- Time-Stamped Submissions
- Correction Changes
BOOST Can Help You Stay Compliant
At BOOST, keeping government contractors compliant is a big part of what we do. We understand the unique challenges and complexities that small and mid-size government contracting businesses face, and we have the experience and knowledge to help you stay within the bounds of regulations so that you don’t get hit with any nasty surprises during a DCAA audit.
Contact us today to learn more about how we can help your GovCon business succeed with accurate and compliant accounting.