If your company holds government contracts, you’ve likely encountered the alphabet soup of compliance requirements: DCAA, FAR, DFARS. Among these, one question consistently keeps government contractors awake at night: “Is my Excel timesheet DCAA compliant?” The short answer? Not likely. While Excel can technically record time, meeting the Defense Contract Audit Agency’s stringent requirements is…
A Texas-based aerospace manufacturer lost $6.8 million in allowable facilities capital cost of money during their fiscal year 2024 contract negotiations after DCAA auditors rejected their net book value calculations for systematic violations of Cost Accounting Standard 414. The contractor’s failure to properly exclude fully depreciated assets, adjust for accumulated depreciation timing, and segregate land…
A mid-Atlantic defense contractor faced $19.8 million in questioned costs after DCAA auditors discovered systematic violations of executive compensation limitations during their 2024 incurred cost audit. The contractor’s failure to properly calculate and segregate executive compensation exceeding the statutory $671,000 ceiling for fiscal year 2025 resulted in automatic unallowable cost penalties, contract modification requirements across…
A California-based engineering contractor faced $11.4 million in questioned costs after DCAA auditors rejected their health insurance allocation methodology during their fiscal year 2024 incurred cost audit. The contractor’s practice of allocating health insurance premiums using headcount rather than labor hours violated Cost Accounting Standard 405 requirements for allocating costs based on causal or beneficial…
A major systems integrator discovered the devastating compounding effect of unallowable cost penalties when DCAA auditors imposed $14.3 million in additional charges beyond the initial $8.7 million in disallowed costs during their fiscal year 2024 audit. The contractor’s inclusion of unallowable entertainment expenses, excessive compensation costs, and lobbying expenditures in their cost pools triggered the…
A Fortune 500 defense contractor faced $38.4 million in disallowed indirect costs after DCAA auditors rejected their overhead rate proposal for inadequate supporting documentation during fiscal year 2024 negotiations. The contractor’s failure to provide acceptable cost pool segregation evidence, proper allocation base justification, and compliant organizational realignment documentation resulted in a 47% reduction in proposed…
A multinational aerospace contractor faced $14.3 million in questioned costs and immediate contract suspension after DCAA auditors discovered systematic CAS 410 violations across seven subsidiary companies spanning four states. The contractor’s failure to properly identify business units under Cost Accounting Standards 410 resulted in improper cost allocations totaling $47.8 million over three fiscal years, triggering…
A Fortune 500 defense contractor recently paid $8.7 million in penalties after DCAA auditors discovered systematic violations of tangible asset capitalization requirements under CAS 404. The contractor’s $1,000 capitalization threshold—considered “industry standard” by their CFO—directly violated federal cost accounting standards, resulting in questioned costs, contract suspensions, and a two-year remediation process that cost an additional…
Recent Government Accountability Office reports indicate that NASA contract obligations exceeded $665 billion annually, making proper oversight essential for taxpayer protection. However, industry data suggests that first-time NASA contractors face compliance failure rates approaching 40%, with timekeeping deficiencies representing the most common audit finding. Audit Frequency and Scope Analysis NASA audits follow predictable patterns that…
A major aerospace contractor faced $47.2 million in questioned costs after DCAA auditors discovered systematic violations of Cost Accounting Standard 420 regarding Independent Research and Development (IR&D) cost accounting. The contractor’s failure to properly segregate IR&D costs above the statutory ceiling resulted in contract termination, suspension from federal contracting, and civil penalties under the False…