10 keys to evaluating DCAA compliant accounting software

• 6900 East Camelback Rd. Suite 805 Scottsdale, Arizona 85251

• Phone: 480-922-1700

• Email: [email protected]

Dan Murphy,

President

Barbara McElnea

Director, Solution

Management

10 Keys to Evaluating DCAA Compliant Accounting Software

Agenda

• DCAA Charter and Interests

• DCAA Compliance Requirements

• 10 Keys for DCAA

• How Can Government Contractors Meet the DCAA Compliance Challenge?

• Review of SAP + Dassian Enterprise Solution for Government Compliance

• Summary

1/22/2014 ©Copyright 2013 Dassian Inc.

Defense Contract Audit Agency

• DCAA was established as a separate agency of the Department of Defense in July 1965.

• Operates under the control of the Under Secretary of Defense.

• Charter is to perform DoD contract audits and provides accounting and financial advisory services to other Government agencies as appropriate.


DCAA General Audit Interests

• DCAA is concerned with identifying and evaluating all activities that contribute or have an impact on proposed or incurred costs of Government contracts.

• DCAA evaluates contractors’ financial policies, procedures, and internal controls.

• DCAA performs audits which identify opportunities for contractors to reduce costs.


DCAA Major Areas of Emphasis

• Internal Control Systems

• Management Policies

• Accuracy and Reasonableness of Cost Representations

• Adequacy and Reliability of Records and Accounting Systems

• Financial Capability

• Contractor Compliance with Contractual Provisions having Accounting Significance such as Cost Principles CFR (FAR, Part 31), Cost Accounting Standards CAS (FAR, 52.230-2), and Truth in Negotiations Act TINA (FAR 52.215-10, 11, 12, 13).


DCAA Pre-award Survey

• Pre-award survey is an evaluation of prospective contractor’s ability to perform a proposed contract including accounting system survey.

• May cover technical, production, quality assurance, financial capability, accounting system and other considerations.

• Two Categories of Information – Contractor’s financial capability to perform the

contract – Adequacy of accounting system to accumulate the

type of cost required by the contract

• Pre-award Survey Form SF1408


DCAA Post Award Audits

• Major objective of post award audits is to determine if the contractor’s accounting system is adequate for accumulating and billing costs on Government contracts.

• Performed at the request of a contracting officer when (1) a follow-up pre-award survey is recommended or (2) a pre-award survey was not conducted prior to contract award and the contracting officer determines that an audit is required to support contract requirements.


Key DCAA Compliance Areas • Accounting system is under general ledger control • Costs are in accordance with Generally Accepted Accounting Principles (GAAP) • Adequate timekeeping system • Accumulates direct costs by contract (job costing) • Proper segregation and consistency of direct and indirect costs • Ability of labor system to charge direct and indirect labor to the appropriate cost

objectives • Labor system functions according to CAS standards for actual cost labor

distribution and total time accounting • Ability to define and segregate allowable and unallowable costs. Contracts costs

exclude unallowables. • Logical and consistent allocation methods of indirect cost pools to intermediate

and final cost objectives • Ability to record contract terms and flow down required contract clauses to

subcontractors such as CAS clauses, prime contract Number, DPAS rating • Segregation of preproduction costs from post production costs • All costs are reasonable, allocable to contracts, in accordance with generally

accepted accounting principles (GAAP) and Cost Accounting Standards (CAS), and not prohibited by the contract or Government regulation

• Accounting system can support interim and final indirect rates


10 Keys for DCAA

• Time Entry per DCAA regulations • Expense Entry per DCAA/gov requirements – JTAR etc. • Segregating Direct from Indirect Costs • Segregating Allowable vs Unallowable Costs and not

including Unallowable Costs on Government Contracts • Cost Pools and Allocation for Provisional versus Actual

Indirect Rates • Accurate Billing and Billing formats for All Contract Types • Billing Cost Backup Showing Original General Ledger

Postings • CAS compliance including Actual Labor Costing and Total

Time Accounting where applicable • Contract Flow Down to Subcontractors • Retroactive Application of Rates for Billing and Costing


Who is Dassian?

• Software Product Company since 2000

• Headquarters: Scottsdale AZ

• 400+ Customers – most of which are GovCons

• Provides a Leading GOVCON Enterprise Solution based on SAP’s world-class ERP platform

– Meets Major Government Compliancy

– Quickstart, Low-Cost, Pre-Configured, Fast Implementation and Training

• Offers Consulting and Implementation Services

• SAP Channel Partner


Dassian’s GOVCON Value

• Enables Government Compliance – Job Costing – Cost Accounting Standards / Indirect Costing – Labor Accumulation – TimeKeeping – Billing – Contract Flow Down to Suppliers – Earned Value Management – Incurred Cost Reporting

• Supports All Major End-to-End Business Processes • Can run both commerical and government business

processes in one environment • Transparency and Profitability at the Lowest Levels of your

business (project level)


Dassian Value Drivers

• Extends SAP Footprint for Government Compliant Processes

- Same code base

- Same look and feel

- Same configuration capability

Value : Lower cost of ownership, shorter learning curve, same terminology company wide

© 2013 All rights reserved Wednesday, January 22, 2014

Partner

Managemen

t

Knowledg

e &

Resource

Lifecycle

Engagemen

t

Managemen

t

Product Lifecycle Data Mgmt.

Customer Relationship Management

IT Service

Delivery &

Support

Program

& Project

Mgmt.

SAP Industry Enhancements

Program

& Project

Mgmt. Aftermarket

Support

Supply

Chain

Fulfillment

Manufac-

turing

Models

Product

Lifecycle

Data

Mgmt.

Marketing &

Business

Acquisition

Supply

Chain

Planning

DCAA Compliant Solutions

Project Planning and Earned Value Composite (PPC)

Incurred Cost Reporting

MS Project / SAP ERP Integration (MSIS)

CAS Compliant Costing

Actual Labor Costing (ALC)

Government Contracts and Billing

Workforce Authorization

Contract Flowdown

Where does Dassian fit in SAP Ecosystem?


Dassian Industry Focused Solution


Rapidly Implement CAS & Contract Compliance for Government Contracting

SF1034 & SF1035 Invoice Forms

Incurred Cost Submission, CPR Reports

Pre-Defined CAS Accounting, and Disclosure Statement

Training, Testing, and Process Documentation

Cost Plus, T&M, FFP Contracts & Automated Billing

Timekeeping & Payroll

Contract Flow Down

Contract Management

Financial Management

SAP ERP + Dassian Add-on

Payment

Processing

Time & Expense

Capture Invoicing Job

Costing

Payroll

Processing

Create/Manage

Contract

5 7 1 2 6 4 3 8

Create

Proposal

Burden

Application

DP002.3 DP046 DP046

DP011 DP011 DP014

DP010 DP051

Forward Pricing

CLIN Setup

Contract Mods

Fees & Witholds

ACRN Mgmt

Funding Control

Forms & Vouchers

Proposal WBS

Contract WBS

Charge Codes

Workforce Auth

Applied Burden

Profitability Reporting

Project Cash Flow

Payroll Actual Labor

Costing

Non Labor

Costing

Actual Burden

Incurred Cost Sub.

DP032

9

Compliance &

Reporting

Task Planning

Program Baseline

Resource Mgmt

CPR Project Status

EV Mgmt

ETC Gen.

EAC Gen.

CFSR

Project Management

Schedule Integration

Contract Flowdown

DP004

Dassian Product Roadmap


Summary Points

• Finally!….a turn-key GOVCON solution exists: Meets major DCAA government compliancy

– Rapid to implement

– Low cost

– Run both commerical and government business processes in one environment

– Scalable to grow with your organization

- Dassian’s GOVCON Enterprise Solution Built for Government Contractors and enabled by SAP’s world-class ERP solution.


Thank You!


• 6900 East Camelback Rd. Suite 805 Scottsdale, Arizona 85251

• Phone: 480-922-1700

• Email: [email protected]

Barbara McElnea

Dassian Director, Solution Mgmt

Dassian & SAP Webcast ― https://www.youtube.com/dassianinc

Transparency Needed for Today’s Government Contractors

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Notices


10 keys to evaluating DCAA compliant accounting software

Technology

Transcript of 10 keys to evaluating DCAA compliant accounting software