Government Contract Accounting Systems Compliance

A special two-day program on accounting systems as they relate to procurement activities with the Federal Government. Contracting professionals, finance, accounting, and management teams will benefit by attending this course together. A team discount is available.

This course is designed to explain the Government procurement regulatory requirements that affect a Government contractor’s accounting system, with an emphasis on cost accounting by contract. The instruction outlines specific components of an acceptable contract cost accounting system with references to critical regulations governing those requirements. The instruction also discusses methods for adapting those requirements into a well-functioning compliant cost accounting system.

The course begins with a basic understanding of the Government’s procurement approach, types of contracts, key procurement players, and other information necessary to understand the importance of a cost accounting system. More detailed discussion follows covering requirements for identifying direct costs, pooling and allocating indirect costs, capturing unallowable costs, documenting all processes, and project ledger requirements. Our instructors will outline the dangers and pitfalls of ineffective accounting practices through real-life experiences learned while working in the procurement environment. This course will benefit contractors who may be new in developing their accounting systems for government contracting and also for experienced contractors who want to improve upon and update their existing systems and practices.

One of the unique features of the course is the use of a practical case study which reinforces the application of compliant cost accounting system practices through a hypothetical Government contractor scenario. This case exercise will highlight cost objective identification features mandated by the Government and illustrate best practices in the design and implementation of a functioning cost accounting system. The case study and real-life experiences the instructors will share with you will help you apply what you’ve learned on the job. This learning methodology also provides a forum for discussion, questions, and answers.

We look forward to your participation.

Government Contract Accounting Systems Compliance Course Curriculum

Introduction to the Regulatory Environment
1. Overview of the Federal Marketplace
  1. Acquisition Cycle
  2. The Regulatory Environment
  3. Bid Proposals and Contract Award
  4. Contract Performance and Closeout
  5. Foundation Expectations of Government in Accounting Systems
2. Main Players in Acquisition Process
  1. Procuring Contracting Officer (PCO)
  2. Administrative Contracting Officer (ACO)
  3. Defense Contract Audit Agency (DCAA)
  4. Inspector General (IG)
3. Key Regulations Affecting Cost Accounting Systems
  1. FAR Part 9 Contractor Qualifications
  2. FAR Part 15 Contracting by Negotiations
  3. FAR Part 16 Contract Types
  4. FAR Part 31 Cost Principles
  5. FAR Part 32 Contract Financing
  6. Cost Accounting Standards (CAS)
  7. Truth-in-Negotiations Act (TINA)

Establishing an Adequate Cost Accounting System
1. Foundation Requirements
  1. General ledger Controls & Requirements
  2. Financial Tracking and Profitability Evaluation
  3. Subsidiary Systems Expectations
  4. Chart of Accounts
  5. Reconciliation Processes
2. Basic Job Cost Accounting Expectations
  1. Cost Segregation by Contract
  2. Project Cost Ledger System
  3. Tracking Unallowable Costs
  4. Transaction Traceability to Subsidiary Ledgers
  5. Requirements of SF 1408
3. Specific Cost Accounting Provisions
  1. Direct vs. Indirect Costs
    1. Understanding Direct Costs & Allocation Techniques
    2. Indirect Costs
      1. Pooling Logical Cost Groupings
      2. Selecting Appropriate Allocation Bases
      3. Overhead vs. G&A
      4. Intermediate Cost or Service Centers
    3. Consistency in Allocating Costs—CAS 402
  2. Accounting for Unallowable Costs
  3. Documentation Expectations
  4. Timekeeping and Labor Charging
  5. Billing System
    1. Relationship to Accounting System
    2. Billing Indirect Costs
    3. Monitoring Invoiced Amounts to Contract Ceilings
    4. Allowable Cost and Payment Contract Clause
  6. Relationship of EVMS to Accounting System

Expanded Discussion of Selected FAR Part 31 Provisions
1. Contracts Covered by FAR Part 31
2. Selected Costs
  1. Public Relations/Advertising
  2. Bad Debts
  3. Compensation
  4. Contributions
  5. Cost of Money
  6. Employee Morale, Health & Welfare
  7. Entertainment
  8. Fines & Penalties
  9. IR&D/B&P
  10. Interest
  11. Lobbying
  12. Organization
  13. Professional & Consultant Costs
  14. Relocation
  15. Rental
  16. Selling & Marketing
  17. Trade, Business Technical & Professional
  18. Employee Travel

Overview of Government Contract Audits Linked to Cost Accounting Systems
1. Bid Proposals
2. Accounting System Audits
3. Provisional Indirect Billing Rates
4. Incurred Cost Proposals
5. CAS Compliance
6. Estimating Systems
7. Timekeeping & Labor Charging
8. Billing Systems
9. Financial Capability
10. Purchasing System
11. Defective Pricing

Case Study on SAMPLECO Contractor
1. Designing Compliant Chart of Accounts
2. Segregation & Tracking of Unallowable Costs
3. Direct vs. Indirect Cost Identification
  1. Identifying Direct Costs
  2. Charging Indirect Costs to Appropriate Cost Center
4. Indirect Cost Centers
  1. Overhead
  2. General & Administrative
  3. Intermediate/Service Centers
  4. Assigning Appropriate Allocation Bases
5. Calculating and Tracking Actual Indirect Rates
6. Job Cost Reports
  1. Grouping Direct Costs by Job/Contract
  2. Using Provisional Indirect Rates
7. Billing System Considerations
  1. Billing from Job Cost Summaries
  2. Adjusting Provisional to Actual Indirect Rates
8. Charging & Tracking Costs for Four Typical Types of Contracts

The Course Faculty

The Course Faculty consists of Government Contract Professionals from the consulting firm of Beason & Nalley, Inc., Huntsville, Alabama.

Darryl Walker, Owner, Beason & Nalley, Inc., specializes in government contract compliance services. Prior to joining Beason & Nalley in 2002, Darryl was employed with the Defense Contract Audit Agency (DCAA) having served in various DCAA management and technical capacities for 34 years. His vast experience in the government procurement and consulting industries has included preparing or analyzing forward pricing and incurred cost proposals, evaluating compliance with FAR contract provisions and Cost Accounting Standards, providing contract negotiation support, and preparing clients for DCAA audits. Darryl has also been principal lecturer for workshops and seminars related to the FAR cost principles, job cost accounting systems, cost proposal preparation, defective pricing, termination claims, and government audit risk assessments. Darryl is a Certified Public Accountant and a Certified Fraud Examiner.

R. Scott Butler, Certified Public Accountant, is an Owner in Beason & Nalley’s Government Contract Consulting Group and Audit Practice. Scott has 20 years of experience in Government Contracting, including 5 years as Director of Finance and Accounting with a large publicly held government contractor and more than 15 years of consulting with government contractors around the country on a wide range of issues, including compliance with FAR, CAS, audit issues, revenue recognition and complex cost structures. He has taught over 70 classes throughout the United States for the NASA on financial management and contract compliance during the past 8 years.

Michael E. Steen, Certified Public Accountant, is a Senior Managing Consultant in Beason & Nalley’s Government Contract Consulting Group. Prior to joining Beason & Nalley in 2007, Mike was employed with DCAA and has over 30 years experience which will provide our clients with a high degree of technical competence. As a senior executive with DCAA over the past several years, Mike was responsible for the management of audits of approximately $25B annually and management of agency resources approximating 800 employees. Mike was also involved in conducting or managing a variety of compliance audits, to include cost proposals, internal controls and related systems, Cost Accounting Standards, claims, defective pricing, and special programs. He was also actively involved in contract disputes and litigation, and has prepared and presented various lectures and seminars to DCAA staff and business community leaders. Mike also served as a member of the Executive Steering Committee for DCAA during his tenure as a Regional Director.