If your company holds government contracts and any of your people work from home, DCAA can audit those employees without ever visiting your office. It is called a floor check, and when DCAA runs a floor check on remote employees it uses phone calls, video conferences and supervisory verification interviews instead of a physical walkthrough. This article is about what those checks look like on your side of the call, and what your books and timesheets need to survive one.
Treat a virtual floor check with the same urgency as an in-person visit. DCAA’s own audit manual tells auditors that floor checks “should be in-person, to the greatest extent possible,” and that alternative procedures “such as, by telephone or by video conferencing” are to be designed by the audit team as needed. The manual goes further for home-based staff: the auditor “should be able to perform floorcheck of the employee by telephone or video conferencing.” The questions and the timekeeping evidence standards do not change with the format [DCAA Contract Audit Manual, Chapter 6, 6-404 and 6-405.5].
The shift to remote and hybrid work is permanent for most GovCon firms, and DCAA has written the consequences into its manual rather than treating them as a temporary accommodation.
DCAA designed its floor check procedures for physical offices. Auditors walked corridors, matched faces to timesheets, and observed work in progress.
That model broke when half the workforce went home. DCAA adapted by allowing telephone and video interviews for off-site employees. But the agency never relaxed its standards.
It expanded its toolkit. Contractors who assume remote work reduces floor check exposure are making a dangerous bet. The auditor who once walked your hallway now dials into your Zoom.
What DCAA Floor Checks Verify (and Why Remote Changes the Equation)
A DCAA floor check serves three objectives: verifying the existence of employees who bill to the contract, evaluating timekeeping internal control procedures, and evaluating the accuracy of labor hour charges to the contract. Auditors sample employees from contractor rosters, confirm those employees are working, and compare what they observe against timesheet records and labor distribution reports. For remote workers, the auditor replaces physical observation with a phone or video call, but every other verification step remains identical [DCAA Career Blog: Common Audits].
Remote work complicates three specific verification points. First, the auditor loses the ability to confirm physical presence visually. A phone call replaces direct observation, and the auditor must rely on the employee’s responses, supervisor attestations, and digital evidence.
Second, the auditor cannot casually observe whether work activity matches the contract being charged. In an office, an auditor sees an engineer at a workstation running simulation software. Remotely, the auditor asks questions and reviews documentation.
Third, supervisory oversight becomes harder to verify. DCAA CAM 6-405.5 sets the minimum internal controls for a work-at-home program, and two of them bear directly on the supervisor: “continuing evaluation of the participating employee’s performance in completing assigned tasks,” and “written documentation of the specific tasks to be performed along with expected completion dates.” A supervisor who approves time without either one cannot show the auditor how the hours were known to be real.
When a supervisor sits 200 miles from the employee, the auditor will probe how that knowledge is obtained. Weekly status meetings? Daily standups? Project management tool logs? The auditor wants specifics, not assurances.
The DCAA Virtual Floor Check Process
DCAA has authorized telephone and video conferencing as alternate floor check techniques for remote and hybrid workforces. In practice, auditors have shifted toward risk-based scheduling for labor audits: contractors with weaker internal controls receive more frequent audits, while contractors with strong electronic timekeeping systems, documented policies, and clean audit histories see longer intervals between checks.
Three things contractors need to understand about virtual floor checks. DCAA’s preference remains in-person interviews and floor checks wherever practicable. Virtual techniques supplement on-site visits. They do not replace them.
The shift to risk-based scheduling means audit frequency now reflects your system maturity. Contractors with strong controls, documented policies, and clean histories earn longer intervals. Contractors with gaps earn more frequent visits, virtual or in person.
During a DCAA virtual floor check, expect this sequence:
- Auditor contacts the contractor’s designated representative to initiate the floor check and request the current employee roster, active contract list, and timekeeping records for the audit period.
- Auditor selects a sample of employees from the roster, including remote workers, and schedules phone or video interviews. Interviews are typically unannounced to the employee, even if the contractor’s representative knows the check is occurring.
- Auditor interviews each selected employee by asking about current work assignments, charge codes, timekeeping procedures, supervisor approval processes, and whether the employee received written timekeeping instructions.
- Auditor compares interview responses against timesheets, labor distribution records, and the contractor’s timekeeping policy. Discrepancies generate documented findings.
- Auditor evaluates work-at-home controls specifically: Does the contractor have a WAH policy? Does the employee know the policy? Has the supervisor documented evidence of work performed?
Work-at-Home Policy Requirements for DCAA Compliance
Remote workforce DCAA compliance starts with a documented work-at-home (WAH) policy. DCAA auditors evaluate WAH programs as a distinct category during floor checks, and the manual runs a materiality test first. Where work-at-home labor is material, no written policy means a cited deficiency. Where it is not material, the auditor instead notifies the contractor in writing that adequacy will have to be demonstrated once those costs do become material, and establishes the labor costs by other means. A contractor with half its staff remote is not in the second category.
The policy is not a nice-to-have human resources document. CAM 6-405.5 makes it an auditable internal control: where work-at-home costs are material, the auditor evaluates the written policies and procedures, and inadequate ones are cited as a labor accounting system deficiency, usually under the Labor Authorization/Approval or Timekeeping control objectives.
In DCAA practice, auditors look for a WAH policy addressing five minimum elements:
| WAH Policy Element | What Auditors Look For | Common Deficiency |
|---|---|---|
| Written telework agreement | Signed agreement between employee and contractor outlining expectations, work schedule, and deliverables | No agreement exists, or agreement lacks specifics about timekeeping obligations |
| Documented evidence of work performed | Deliverables, project outputs, status reports, or work logs demonstrating productive work during charged hours | No work product evidence retained; contractor relies solely on timesheet entries |
| Supervisory review of remote work | Documented review of work output by supervisor with knowledge of assignments; review frequency specified in policy | Supervisor approves timesheets without reviewing any deliverables or work product |
| Periodic on-site presence | Requirement for the employee and supervisor to meet periodically at the contractor work site | Fully remote employees never visit the office; no in-person touchpoint documented |
| Timekeeping procedures for remote work | Remote staff submit timecards through the same company-wide system as everyone else [CAM 6-405.5(b)(3)], with copies kept at the company facility where applicable | Policy references on-site timekeeping only; no remote-specific procedures exist |
No FAR or DFARS clause lists these elements, but DCAA’s own manual does. CAM 6-405.5(b) sets out the “minimum internal controls necessary for a contractor’s work at home policies to be considered acceptable for Government contract costing,” and the table tracks them. Where WAH costs are material and the written policies are inadequate, the manual instructs the auditor to cite the contractor for a labor accounting system deficiency.
Two points in CAM 6-405.5 catch contractors off guard, and both are worth reading before you write the policy. The first is that the manual still frames work-at-home as an exception: these programs are “usually offered to employees on an exception basis for situations where attendance at the company facility is a hardship.” It then names work that cannot be done at home at all, being work that “must be closely supervised, requires access to non-portable equipment or depends on the frequent interaction with others.” A policy that treats blanket remote work as the default is arguing with the manual the auditor is holding.
The second is core hours: the manual expects WAH employees to “work a mutually agreeable set of core hours to allow management to have access to the WAH employee at designated times.” That single line is where the reachability expectation comes from.
On the on-site meetings, the manual requires that WAH employees “attend periodic meetings at the contractor’s work site to allow the employee and supervisor to discuss work progress, assign new tasks, and evaluate work performed.” It sets no interval. Quarterly is a common choice among government contractors, and the interval is yours to pick. The policy should document whatever cadence the contractor commits to and actually maintains. This is not about productivity monitoring. It validates the employment relationship and gives the supervisor a direct observation baseline to support timesheet approvals.
Preparing Remote Employees for DCAA Floor Check Interviews
Every employee who charges time to a government contract must be ready for a DCAA floor check interview at any time. Remote workers face the same questions as on-site staff, delivered by phone or video instead of in person.
The difference: remote employees have no visual cues from coworkers, no supervisor in the next office to consult, and no preparation window. The call arrives cold.
DCAA auditors ask remote employees these specific questions:
- What is your current job title and labor category?
- What contract or contracts are you working on today?
- What charge code did you use for today’s time entry?
- How do you record your time? What system do you use?
- Do you enter your own time, or does someone enter it for you?
- How does your supervisor review and approve your timesheet?
- Have you received written timekeeping instructions from your employer?
- What do you do if you need to correct a time entry?
- Do you record all hours worked, including uncompensated overtime?
An employee who stumbles on charge codes, cannot describe the correction process, or says “my admin enters my time” creates an immediate finding. Training is the fix. Every remote employee needs to answer these questions fluently before the auditor calls.
Run mock floor checks quarterly. Select three to five remote employees at random, call them without warning during a workday, and ask the same questions DCAA asks. Document the results.
Fix gaps before they become findings. The 30-minute investment in a mock check prevents the 30-day headache of a corrective action plan.
Documentation and Technology Requirements for DCAA Timekeeping Remote Workers
DCAA timekeeping remote workers must satisfy every requirement that applies to on-site employees, plus additional documentation proving remote work occurred as recorded. The timekeeping system becomes the primary evidence trail when physical observation is impossible. DFARS 252.242-7006(c)(9) requires an accounting system that provides “a timekeeping system that identifies employees’ labor by intermediate or final cost objectives” [DFARS 252.242-7006]. The clause does not require that system to be electronic. In our experience it does, because a remote workforce on paper timesheets has no timestamps, no login trail, and nothing to corroborate the hours once the auditor is off site.
Remote-specific documentation requirements include:
- Electronic timekeeping with timestamps. System logs must prove daily, contemporaneous recording. A remote employee submitting five days of time entries on Friday afternoon triggers the same finding it would on-site. The system must enforce daily entry deadlines or flag late submissions for supervisor review.
- VPN or access logs. Login records from the contractor’s network, project management tools, or collaboration platforms provide corroborating evidence that an employee was working during charged hours. DCAA auditors increasingly request these logs during virtual floor checks.
- Work product documentation. Emails sent, documents produced, code committed, reports filed. Each represents tangible evidence that work occurred. Contractors should establish a standard practice of retaining weekly work product summaries for remote employees.
- Supervisory review records. Document that the supervisor reviewed specific deliverables, not only the timesheet. Meeting notes, project status updates reviewed, and approval emails all serve as evidence of meaningful oversight. A rubber-stamp approval from 200 miles away is the opposite of meaningful supervisory review.
- Video conferencing capability. DCAA auditors conduct floor checks via video or phone with remote employees. Employees must have functioning technology and availability during normal work hours. An employee who cannot be reached during a virtual floor check is treated the same as an empty desk during an on-site visit.
A clean virtual floor check looks much the same wherever it happens. Every employee the auditor reaches opens their timesheet in under a minute, names the charge codes they are billing that day, and describes what they are actually working on. The interviews move quickly because nobody has to go looking for anything.
That readiness rarely comes from sophisticated technology. It comes from mock floor checks run on a regular cadence and a written WAH policy employees have actually read.
Common Failures in Remote Workforce DCAA Compliance
Virtual floor checks reveal a predictable set of failures. These are the deficiencies auditors document most often during a DCAA floor check. Remote employees in hybrid organizations are particularly exposed.
| Failure | What the Auditor Finds | Prevention |
|---|---|---|
| No WAH policy | Contractor has remote employees but no documented work-at-home policy addressing timekeeping controls | Draft and implement a WAH policy covering the five elements above before the next audit cycle |
| Employee unreachable | Auditor calls a remote employee during charged work hours; employee does not answer and does not return the call within a reasonable time | Require remote employees to be reachable by phone during all hours charged to a contract; include this in the telework agreement |
| Charge code ignorance | Employee cannot state the charge code for the contract they are billing today | Quarterly training on active charge codes; post charge code reference sheets in project management tools |
| Batch time entry | System logs show remote employees entering entire weeks of time on Friday or Monday | Configure system to require daily entry; implement auto-reminders; flag batch entries for supervisor investigation |
| Supervisor rubber-stamping | Supervisor approves timesheets within seconds of submission without reviewing work product or verifying accuracy | Require supervisors to document specific deliverables reviewed alongside each timesheet approval |
| No corroborating work evidence | Timesheet shows 40 hours charged to Contract X, but no emails, deliverables, meeting attendance, or system activity supports it | Implement weekly work product summaries; retain VPN logs and collaboration tool activity records |
The “employee unreachable” scenario deserves emphasis. When an auditor conducts an on-site floor check and finds an empty desk, the finding is documented immediately. The virtual equivalent is an unanswered phone call during charged hours.
Contractors should treat phone availability during work hours as a non-negotiable term of the telework agreement.
Key Takeaways
- Virtual floor checks carry the same weight as in-person visits. DCAA’s authorization of alternate techniques was designed for audit efficiency. It did not lower the compliance bar. Phone and video interviews test the same knowledge and produce the same findings as a hallway visit.
- A documented WAH policy is an auditable internal control under CAM 6-405.5. Any contractor with remote employees needs a written policy covering eligibility and the type of work allowed, advance approval, task documentation, supervisory evaluation, periodic on-site meetings, core hours, and remote timekeeping procedures. Where work-at-home labor is material, no policy means a cited labor accounting system deficiency.
- Mock floor checks are the highest-ROI compliance investment for hybrid teams. Call three remote employees without warning, ask the standard DCAA questions, and document results. Thirty minutes of prevention eliminates months of corrective action.
- Remote employees must be reachable during core hours. CAM 6-405.5(b)(2) expects a mutually agreed set of core hours that gives management access to the employee at designated times. An unanswered call during a virtual floor check invites the same scrutiny as an empty desk. Put the core hours and the availability expectation in every telework agreement.
- Corroborating evidence separates clean audits from findings. Timesheets alone are not sufficient for remote workers. VPN logs, work product, meeting records, and supervisory review documentation together create the evidence package DCAA auditors look for in practice.
Frequently Asked Questions
How does DCAA conduct a floor check for remote employees?
DCAA conducts floor checks for remote employees by phone or video conference. The auditor contacts employees at their home office during charged work hours, asks about current assignments and charge codes, verifies timekeeping practices, and compares responses against timesheet records and labor distribution reports. The auditor also evaluates whether the contractor has a documented work-at-home policy with appropriate supervisory controls.
Does DCAA require a work-at-home policy for remote contractors?
DCAA CAM 6-405.5 sets the minimum internal controls a work-at-home policy must have to be acceptable for government contract costing: eligibility and the type of work permitted at home, advance management approval, continuing evaluation of performance, written documentation of tasks and due dates, periodic meetings at the work site, agreed core hours, and timecards submitted through the company-wide system. Where work-at-home labor costs are material and those written policies are missing, the manual directs the auditor to cite a labor accounting system deficiency.
What questions does DCAA ask remote employees during a floor check?
Auditors ask remote employees to identify their job title, current contract assignments, active charge codes, timekeeping system and procedures, correction processes, and whether they received written timekeeping instructions. The auditor also confirms the employee enters their own time daily, records all hours including uncompensated overtime, and understands the supervisory approval process.
Are virtual floor checks less rigorous than in-person floor checks?
No. CAM 6-404 tells auditors floor checks “should be in-person, to the greatest extent possible,” with telephone and video conferencing as alternative procedures the audit team designs as needed. The preference is for in-person work, not a lighter standard for the rest, and the same evaluation criteria apply to virtual interviews. Discrepancies in employee responses, missing documentation, and timekeeping control weaknesses produce the same findings regardless of the interview format.
What happens if a remote employee cannot be reached during a DCAA floor check?
An unreachable remote employee during charged work hours creates the same audit concern as an empty desk during an on-site floor check. The auditor documents the failed contact attempt and evaluates whether the contractor’s supervisory controls verify employee availability. Repeated unreachable employees signal a systemic oversight failure and trigger expanded audit scope.
How often does DCAA conduct virtual floor checks?
In practice, DCAA schedules floor checks based on risk rather than a fixed calendar. Contractors with strong electronic timekeeping systems, clean audit histories, and documented WAH policies typically see less frequent checks. Contractors with weaker controls, new government contracts, or prior findings face more frequent virtual and in-person audits. No set schedule exists, and checks remain unannounced.
Get Your Remote Workforce Audit-Ready
Remote work is not going away. Neither are DCAA floor checks. Train your staff, document your WAH policies, and run a mock floor check before the auditor calls.
Take the Compliance Readiness Check to evaluate your current posture, review your timekeeping system requirements, or book a discovery call with Amerifusion Bookkeeping for a CPA-level review of your remote workforce compliance program. Foundational requirements are covered in our DCAA compliance guide and DCAA compliance services page, or see what DCAA bookkeeping services cost.
