Accounting System, DCAA Relations, Incurred Cost Proposals

How is the GAAP Knowledge at DCAA

Okay, I have gotten this question twice in the last month from DCAA reference adequacy reviews:

“Schedule L—We were unable to reconcile the G&A Salaries amounts & Vacation Wages totals to totals on Schedule B.  Please identify which accounts from the schedule B tie back to the amounts listed on the schedule L.  Provide a detail explanation for any differences.”

The question highlights issues surrounding FAB 43 dealing with vacation accruals but I realize that DCAA is trying to get the Schedule L to tie between the general ledger and the 941s. Of course, it would make more sense to change the form but considering how screwed up the Schedule I still is after several revisions, I will not hold my breath.

I am thinking we add a line onto the Schedule L after the vacation or PTO account that says “Adjust Vacation Accrual to Cash Payments”.

Of course this is an excellent and legitimate target for DCAA audit but I am not sure it is appropriate for adequacy review.

DCAA Relations, Incurred Cost Proposals

Statute of Limitations Does Mean SOL

I guess we need to start sending the general ledger detail in with the Incurred Cost Proposal….


The government argues that its claim could not have accrued before 1 August 2013, when CLX provided the General Ledger detail showing the patent legal costs to the DCAA (gov’t br. at 4). Diane Chang, a DCAA auditor, provided an affidavit in which she states that DCAA requested the General Ledger detail from CLX on 24 July 2013 and received it on 1 August 2013 (Chang aff. ~~ 4-5). Ms. Chang also states that she has searched the DCAA files and did not find General Ledger detail anywhere in CLX’s 13 August 2008 submission. She further states that the only information CLX provided on legal costs prior to 1 August 2013 was the single line item identifying only generic “legal services” in the amount of $89, 196. (Id., ~~ 6-7)

Based on the foregoing, we cannot conclude that the government had any reason to anticipate that CLX would claim reimbursement for patent legal costs in 2007. CLX has not met its burden of proving that the government’s claim accrued on 13 August 2008 or at any other time before DCAA received the underlying General Ledger detail on 1 August 2013. Cf Combat Support Associates, ASBCA Nos. 58945, 58946, 14-1 BCA ~ 35,782, vacated on other grounds on recon., slip op., 16 March 2015 (government claim did not arrive at time of initial incurred cost submission, but only after supporting data was submitted from which it could conclude that certain claimed costs were unallowable). We hold that the government’s claim is not barred.

Accounting System, Cost And Accounting, DCAA Relations, Incurred Cost Proposals, Running Your Business

Dear Auditor, Before you ask for my driver’s license could you read this?

Just got off the telephone with a client in Georgia where the DCAA office requested the contractor to email copies of every employee’s driver’s license to prove that they were real. The contractor successfully declined the request.

On the other side of the country, another DCAA has requested access to the contractor’s I9’s. I am encouraging the contractor to decline this request.

Researching the issue I stumbled on DCAA’s The Privacy Act: An Employee’s Guide to Privacy.  Here is one of the many relevant statements made within this DCAA document:

The Privacy Act provides the Government with a framework in which to conduct its day-today business when that business requires the collection or use of information about individuals. Specifically, it requires that the Government:

  • Maintain no secret files on individuals;
  • Inform individuals at the time it is collecting information about them, why this information is needed, and how it will be used;
  • Assure that personal information is used only for the reasons given, or seek the person’s permission when another purpose for its use is considered necessary or desirable;
  • Allow individuals to see the records kept on them; and provide individuals with the opportunity to correct inaccuracies in their records.

The Privacy Act binds Federal agencies to a “code of fair information practices.” The code sets standards which each Federal agency must meet as it collects, maintains, and uses information.

Or under the responsibilities of DCAA Employees:


You must collect only personal information that is relevant and necessary, not simply useful, to accomplish a specific objective. Whenever you request personal information from someone, you must inform him or her in writing of the legal authority for requesting the information, the purpose for collecting it, what routine uses will be made of this information, whether a response is mandatory or voluntary, and what will be the effect if he or she refuses to respond. Also, whenever you ask a person for his or her social security number, you must state the legal authority and purpose for requesting it, and whether a response is mandatory or voluntary. You should always attempt to collect personal information directly from the individual rather than from other sources wherever practicable