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For small government contractors

Pass Your First DCAA Accounting System Review

You cannot be awarded a cost-plus contract until the government agrees your accounting system is adequate. Fifteen lines on a one-page form decide it. This is a finished example of every one.

  • 83 page guide
  • 5 editable policies
  • 6 tab rate workbook
  • Built by a CPA
Get the handbook — $147

One time. Instant download · PDF, Excel and Word

Not satisfied? Full refund within 60 days, no questions asked.

The problem is not that the rules are secret

They are published. You can read them in an afternoon.

The problem is that nobody will show you what obeying them actually looks like. Search for help and you get two answers. One is a consultant quoting you thousands. The other is a software company explaining why you need their software.

Neither shows you a finished document.

This does. One company, invented so we can print every page of its books, walked through all fifteen lines the auditor checks, with the numbers left in.

The boxes are records you already keep. The arrows are the handoffs, and the handoffs are where things could go wrong. 4 General ledger The book of record. Every cost lands in one of these accounts. Direct cost accounts 5010 labor, 5020 materials, 5030 travel 5 Indirect pool accounts Fringe, overhead, G&A. These accounts are the pools. Unallowable accounts In the books like any other cost. Out of every pool. Never billed. Subsidiary ledger. Total direct costs match. Pool ÷ base = rate, applied to the job 1 Timesheet Every hour, every day, against a job number 2 Labor dollars Pay for the period, split across the jobs worked 3 Job cost ledger Direct costs by contract, a subsidiary ledger 6 Cost report Job direct costs, plus indirect applied by rate 7 Invoice Built from the report, not typed fresh
Page 6 of the guide. The whole system, end to end

What is in the box

Three things, seven files, one download the moment you pay.

One

The guide, 83 pages

All fifteen evaluation points. Each one gives you the rule as the form words it, what the auditor is really asking, the finished document with numbers in it, and how that point gets missed.

Two

The rate workbook, 6 tabs

Fringe, overhead and G&A built from zero, with live formulas. Type your numbers over ours and it recalculates. One tab re-adds the other four by a second route and turns green when the workbook still holds together.

Three

5 policies, editable

Timekeeping, cost charging, unallowable costs, indirect rates, month-end close. Word files. Everything you must change is highlighted, so you can make them yours in an evening.

Also

The auditor's document list

The seventeen things to have ready, and which line each one answers. Part 1 also names the four lines no document on the list covers, and what covers those. Put the folder together now and the request stops being frightening.

Does it even apply to you?

Three questions, and the guide opens with them. If the answer is no, we would rather you knew that before you paid.

1 Do you sell to the federal government, or do you want to? NO Close the file None of this applies to you. YES 2 Does any contract you have, or want, pay you based on what it costs you? Cost-reimbursement, also called cost-plus YES This applies to you The government cannot award the contract until your accounting system is adequate. Read on, and Part 6 turns it into a plan. NO 3 Do you work under a bigger contractor on cost-type work? You are a subcontractor to a prime YES Ask your prime, and read your subcontract The obligation reaches you through the subcontract, not from the government. NO This does not apply to you yet. Everything you do is fixed price, so this review is not standing between you and an award. Two reasons to keep it: the day you bid cost-plus work it arrives with a deadline, and Part 5 will stop you buying the wrong software in the meantime.
Page 2 of the guide

The number that is easiest to get wrong

It is not on the form. It is why the first cost-plus year hurts.

You cannot add your rates together. They sit on different bases. Add 29% fringe to 30% overhead and you will understate your own cost by nearly nine cents on every dollar of labour, and you will not find out until the year is over.

$0.00 $0.50 $1.00 $1.50 $2.00 $1.00 Direct labor what you pay them +$0.29 Fringe 29% of labor $1.29 +$0.387 Overhead 30% of $1.29 $1.677 +$0.377 G&A 22.46% of $1.677 $2.05 Cost to the government THE OVERHEAD STEP IS BIGGER THAN ITS RATE The rate is 30%, but it sits on labor plus fringe, so it adds 38.7 cents to every raw dollar. Adding 29 + 30 gives the wrong answer.
Part 4. The same dollar, built up one base at a time

The workbook does this for your numbers, then prices a task with it.

Who this is for, and who it is not

Buy it if

  • You have won, or are bidding, work that pays your costs rather than a fixed price
  • Somebody has mentioned a preaward survey, SF 1408, or an accounting system review
  • You run QuickBooks or similar and have been told you need to replace it
  • You would rather spend an evening than several thousand dollars
  • You want to know what your labour actually costs before you bid again

Do not buy it if

  • Everything you sell is firm-fixed-price and you have no plans to change that
  • You are not selling to the federal government at all
  • You want somebody to do it for you. This is a guide, not a service
  • You need an opinion on your own company. A book cannot give you one
  • You are already running a purpose-built government accounting system with support
Where this handbook stops. Fourteen of the fifteen lines can be fixed by doing the work in this handbook. One cannot. Line 5 asks whether your system is running now, with real transactions in it, and only time fixes that. If your review is next week, this handbook will make you far better prepared, and it will not manufacture the history you do not have.

Who wrote it

Joseph Kamara, CPA

Founder and Managing Consultant
Amerifusion Bookkeeping

  • CPA
  • CISSP, CISA
  • MBA

Testing a system against written criteria and saying plainly where it falls short is attestation work, and it is what I did in public accounting before this. An accounting system review is the same discipline pointed at a different rulebook.

Every rule in this handbook is quoted from the regulation and cited, so you never have to take my word for it. Each part ends with its sources.

The company in the examples is invented on purpose. That way the documents can be shown with their numbers left in, without exposing anybody's private information.

Questions

Will this make me DCAA compliant?

No, and be careful of anyone who says their product will. Your policies and your records decide it, and your own auditor forms the opinion. This handbook shows you the standard being applied and a finished example of meeting it.

Do I need to buy special accounting software?

At nine people, no. The example company passes on QuickBooks Online with a separate timekeeping app. Part 5 explains exactly when that stops being true and what the next step costs.

Is this SF 1408 or the DFARS accounting system criteria?

SF 1408, the preaward survey, which is fifteen evaluation points across five numbered items. DFARS 252.242-7006 is a different standard with eighteen criteria that applies after award. The handbook says which is which, because they are routinely confused.

Can I use the policies for my own company?

Yes. They are Word files written to be edited, and everything you must change is highlighted. They are accounting policies to adapt, not legal advice, and adopting them does not by itself make any company compliant.

How is this different from a free checklist?

A checklist tells you what is required. This shows you the finished artifact for each requirement, with numbers in it, plus the words to put in your own manual.

Fifteen lines decide it

Get the finished example of every one, the workbook that does your rates, and 5 policies you can make your own tonight.

Get the handbook — $147

One time. Instant download · PDF, Excel and Word

Not satisfied? Full refund within 60 days, no questions asked.

Amerifusion Bookkeeping · CPA-managed bookkeeping for government contractors
amerifusionbookkeeping.com
Built on Standard Form 1408, REV. 1/2014. Every rule quoted from the regulation itself.