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.