Accounting System, Cost And Accounting, DCAA Relations, Incurred Cost Proposals

When is a Timesheet a Timesheet?

December 30, 2013

I am going to argue that the original guidance provided to DCAA auditors in the Contract Audit Manual and the DCAA audit programs, over time, gave birth to a paradoxical view of timekeeping that DCAA continues to trip over on occasion.

DCAA based their original guidance on paper timesheets and included the following guidance:

  • Employee physical possession of the timesheet
  • Timesheets completed in ink
  • Only one timesheet is prepared per employee per period
  •  Timesheets are preprinted with employee name and identification number
  • Corrections are made in ink, initialed by the employee, properly authorized, and provide a sufficient and relevant explanation for the correction.
  •  Employees and supervisors sign the timesheet

This is excerpted from 5.909.1 of the CAM.

Looking at this (filling out in ink, preprinting, initialed corrections, signature, and so on), I am reminded of a legal contract or even a bank draft (check). It always appeared to me that DCAA was providing guidance for the creation of a legal document – a timesheet certified by the employee and accepted by the counter signature. DCAA reinforced this thought several years ago when offices across the country argued that these timesheets needed a unique number just like a check.

I agree with the concept, even if I did not agree with the unwritten guidance for unique numbering.

After basking in the glow of agreement with DCAA, I decided to take it a step forward, especially since some twenty plus years after their introduction, DCAA still fails to provide guidance on how electronic timesheets are created (Please, please do not raise 5.902.2 – that is badge and punch cards).

The final straw came when a DCAA supervisor argued that management intervention was required before an employee could safely utilize the backspace key to change an hourly entry from 4 to 3 (see the subsequent cartoon here). I understood I really needed to introduce some clarification.

What makes a contract a contract is the signature attesting to all that is above it. We do not want lawyers issuing contracts in pencil, but I do not mind if they use that tool to draft it. On numerous occasions over the years, I scratched out a section of a contract and replaced it with a glossed section. The gloss section bears my initials along with the initials of the other party. Who has not scratched out the date on a check, corrected it, and initialed the same?

What makes a timesheet a timesheet is the SIGNATURE. What makes a timesheet final is the COUNTER SIGNATURE. Everything before this is simple conjecture.

This does not mean that Contractors should not set standards for timesheet completion such as daily completion, using ink, initialing changes, and so on.  I encourage weekly timesheets so the manager’s memory is fresh. The guidance provides uniform standards to allow for improved management.

DCAA is free to chime in with their thoughts as long as they understand it is not a timesheet until it is signed (electronically or otherwise) and presented to the employer.

If you believe the difference is too subtle to bother with, just remember the hours I spend arguing with DCAA about the employee’s right to use the backspace key.

Both Books graphic

Available on Amazon or www.dcaacompliance.com

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Accounting System, Cost And Accounting, DCAA Relations, Department of Defense News

DOD OIG Report Calls for CORs to Document ODCs

August 23, 2013

Is that enough acronyms for a title?
New Department of Defense Office of Inspector General (DOD OIG) report suggests Contracting Officer’s Representatives (CORs) request and review actual receipts for other direct costs (ODCs) such as airline tickets. The assumption is that they are to coordinate with DCAA if they question an expense.
I imagine this arises out of the alleged (cough, cough) DCAA backlog and OIG  is desperately trying to find a way to protect tax dollars.
Desperate may be the correct term, as the ladies and gentlemen the OIG suggests to assist in this critical task are neither trained or experienced in cost auditing.
Maybe they should tune in to my webinar next month on M&E? With that I plug our new website.
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DCAA Relations

Did I Say That?

August 1, 2013

I am not sure many staff members within DCMA or DCAA  realize that everything they say in writing is accountable and can come back to haunt them.
Today, I am reminded of the scene in “Casablanca” where Claude Rains is in the middle of closing down Rick’s because he discovered there is gambling going on and someone comes over and hands him his winnings!
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DCAA Relations, Incurred Cost Proposals

Fix it, I Won’t

July 1, 2103

Over the last several years I continue to spend hours discussing the shortcomings and design flaws surrounding DCAA’s recent versions of the ‘model’ ICE (Incurred Cost Electronically)

My favorite complaint is DCAA’s decision to publish their latest two versions in June which, by remarkable coincidence, is only a couple of days before the majority of submissions are due across the country. This was followed up last year by one supervisor’s insistence the new Schedule J be utilized on a submission turned in before the new schedule was even published. This is funnier when I recall that he called the new Supplemental Schedule B by it old name the Schedule T.

The Schedule I bothers me for one serious design dating back to the introduction of the schedule from about a dozen years ago. FAR52.216-7(d) (2) (iii) (I) – Allowable Cost and Payment is pretty clear:

(I) Schedule of cumulative direct and indirect costs claimed and billed by contract and subcontract.

DCAA’s model Schedule I links back to the total costs on the Schedule H and the new document published by DCAA for determining the adequacy of a proposal includes this as a requirement. This now defines the “Current Year Cost FYE” on the schedule I as the total contract costs on the Schedule H.

The Schedule I now takes this figure and the figure from the previous year’s Schedule I to reach a cumulative cost amount. This is then reconciled to the contract “Cumulative Billed” through the last voucher of the year.  The final result is an amount that the contractor has overbilled or underbilled.

Yeah, right.

If these are CPFF contracts the billing includes fees while the Schedule H does not. This would mean that there is a reasonable chance that the Schedule I will always show overbilling by the amount of the Fee (Schedule H costs of $100 compared to billing $100 + $7 in fee shows up as an overbilling of $7).

Of course this assumes that the contractor neatly bills everything in a final voucher for the year. In other words, they bill all of the costs for December 1 to December 31 and not December 21 – January 7. There is no FAR requirement for tidy billing and with the introduction of intra-month billing several years ago it does not even make business sense.

I have heard all sort of amusing rationalizations from DCAA, contractors, and even consultants on this issue over the years.

  • One auditor argued that I could not link the model schedule I to the FAR paragraph I in the regulation.
  • The most common argument is that Billing does not include Fee and the contractor should remove the Fee from the Schedule I (thank God no one has asked me to remove it from the public voucher)

Most contractors and DCAA auditors solve the problem by adding a Fee column to the Schedule I and for years I did this. I stopped doing this several years ago for one simple reason: DCAA kept coming out with new versions of the ICE with this same problem (and new ones). Are the designers even talking to the auditors in the field?

I am always looking for a sign that the DCAA crisis which began in 2008 peaked and we are finally moving forward. Fixing the Schedule I would be such a sign if for no other reason that it would indicate the DCAA bosses in Washington are listening to the people on the front lines.

Fix it, I won’t.

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