Deltek Insight 2011: Meeting DCAA Expectations
Transcript of Deltek Insight 2011: Meeting DCAA Expectations
CP-239: Meeting DCAA Expectations
Presented bySusan Zimmermann – ZooM Consulting LLC
April 12, 20232 ©2011 Deltek, Inc. All Rights Reserved
Project Manufacturing
Human Resources
Project Management
Financial Management
Enabling Success
Winning More Business
Reducing the Cost of Compliance
Increasing Project Visibility
Improving Cash Flow
CRM and Capture Management
Teaming Solutions
Market Intelligence
Business Performance Management
Know More
Win More
Do More
April 12, 20233 ©2011 Deltek, Inc. All Rights Reserved
Project Manufacturing
Human Resources
Financial Management
Project Management
Do More
CRM and Capture Management
Teaming Solutions
Market IntelligenceWin More
Do More
Project Execution & Management
Reporting, GRC & Compliance
Project & Corp Accounting
Time, Expense, Labor, Payroll
Business Performance Management
Know More
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Agenda
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Overview of what will be covered during session Key session takeaways Reaching a Balance in the Current Environment Common Problems and Solutions Questions
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Key session takeaways
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How the DCAA audit environment has changed How to evaluate the possibility of an accounting system change Learn possible solutions to some of your biggest DCAA issues
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Reaching a Balance in the Current Environment
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Reaching a Balance in the Current Environment
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What is going on? Increase in companies with unapproved accounting systems Increase in unfavorable reports coming from DCAA
No issues removed once documented Documentation of responses included
Multiple years of incurred cost audits open Contracting officers have to muddle through lengthy reports
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Reaching a Balance in the Current Environment
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Why is this happening? GAO Reports
Determined there was an issue with audit quality such as: Insufficient testing Inadequate planning and supervision Reporting problems Compromise of Independence Inadequate understanding of controls by the auditor
Caused increased focus on the effectiveness of Contractor Systems Accounting Estimating Property Management Purchasing
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Reaching a Balance in the Current Environment
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Evaluating a Change Legitimate Issue versus misunderstanding
Expressly unallowable cost Interpretation
Business Impact of Change Cost of Changing Effects on Project Costs Small pocket affected or entire organization Pending Contract Awards
Ease of making change systematically FAR and CAS support position
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Common Problems and Solutions
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Common Problems and Solutions
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Labor Costing Issue
The auditor has determined that your methodology of labor costing is inappropriately allocating costs to projects
Myth There is only one way to cost labor
Factors affecting the appropriate costing method for your business Timekeeping Policy Labor Costing period versus pay period Reporting period Amount of Uncompensated Overtime
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Common Problems and Solutions Labor Costing Sample Government Contractor
Attributes Collects time on a weekly basis Pays employees on a bi-weekly basis Adheres to total time accounting Salaried Employees Standard 40 hour work week
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Common Problems and Solutions Labor Costing - Auto Adjust Functionality
Takes a percentage of the employees salary per pay period and divides it by the number of hours in the timesheet period.
Percentage is assigned in Timesheet Period Control Screen An employee with a $2000 bi-weekly salary at 50% would have $1000
apportioned over the hours for a weekly timesheet period
Project Hours Cost Hourly Rate
Fringe 16.00 $344.09
IRD 8.50 $182.79
OH 7.50 $161.29
Direct 1 14.50 $311.83
46.50 $1000.00 $21.50537
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Common Problems and Solutions Labor Costing – Auto Adjust Functionality Pros
Most precise measure of costs to associated cost objective Ease of reconciliation of labor costing to amount paid
Cons
If timesheet period and pay period are not synchronized could inappropriately cost in total time accounting environment with flex time.
1st Wk Hours
1st WkCost
2nd WkHours
2nd Wk Cost Total
Total if portioned over Bi-Weekly Difference
Fixed Price
0 $0 56 $1200 $1200 $1400 ($200)
CPFF 24 $800 0 $0 $800 $600 $200
24 $800 56 $1200 $2000 $2000 $0
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Common Problems and Solutions Labor Costing – Standard Variance Functionality
Uses the Estimated Annual Hours and corresponding Hourly rate fields to cost labor per hour.
Labor posting calculates difference between labor cost and payroll cost Posts difference to standard cost variance account and employee home
org (from employee defaults screen in employee master) Automatically adds a line to the timesheet.
Hours Auto Adjust Std Var Diff
OH 32.0 $842.10 $800.00 ($42.10)
Direct 2 6.00 $157.90 $150.00 ($ 7.90)
Variance Line 0.00 $50.00
38.00 $1000.00 $1000.00
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Common Problems and Solutions Labor Costing – Standard Variance Functionality
Pros Allows all cost objectives to receive consistent hourly rate from week to
week regardless of hours. Associates variance with specific timesheet
Cons Only one account can be used for variance posting Must determine allocation methodology for variance that appropriately
allocates. Can only be run on individual employee basis Must be careful when correcting timesheets if hours are increasing or
decreasing
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Common Problems and Solutions Labor Costing – Payroll Variance Functionality
Uses the Work Hrs in Year and corresponding Hourly rate fields to cost labor per hour.
Payroll posting calculates difference between labor cost and payroll cost Posts difference to payroll variance account and employee home org (from
employee defaults screen in employee master)
Hours Auto Adjust Payroll Var Diff
OH 32.0 $842.10 $800.00 ($42.10)
Direct 2 6.00 $157.90 $150.00 ($ 7.90)
38.00 $1000.00 $1000.00
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Common Problems and Solutions Labor Costing – Payroll Variance Functionality
Pros Allows all cost objectives to receive consistent hourly rate from week to
week regardless of hours. Ease of timesheet corrections
Cons Only one account can be used for variance posting Must determine allocation methodology for variance that appropriately
allocates. Mingling of variance and legitimate payroll issues Only calculated and posted when payroll is run
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Common Problems and Solutions
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Billing Issue
The auditor has determined that you are not appropriately excluding costs from a bill.
How do you ensure someone doesn’t mistakenly bill something? Resolution
Code costs to an unbillable account with an unallowable function code assigned in the project account group.
Code costs to a regular account and exclude that account from the billable accounts in the billing setup. Caution! - unless using a revenue formula of equal to billings, revenue will
still calculate on this account leaving a balance in Unbilled Accounts Receivable.
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Common Problems and Solutions Directly Allocated Costs
The auditor has determined a CAS 403 Noncompliance stating 9904.403-40(a)(1) Home office expenses shall be allocated on the
basis of the beneficial or casual relationship between supporting and receiving activities. Such expense shall be allocated directly to segments to the maximum extent practical. Expense not directly allocated, if significant in amount and in relation to total home office expenses, shall be grouped in logical and homogeneous expense pools…..
Example – Costs for Health Insurance for all segments come in on one bill that is received at the home office and coded to a service center that is allocated out over a basis instead charged directly to the benefiting segments.
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Common Problems and Solutions Directly Allocated Costs
Costpoint has the flexibility to calculate complex rate structures Multiple ways to allocate costs that facilitate compliance
Directly coding upon entry to the appropriate segment when using a multiple company organization structure in one database.
Use of a Service center to allocate the costs based on a homogeneous base.
Use of a multi-job allocation that allocates costs from one project to another project.
Cost pool allocation for residual allocations
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Common Problems and Solutions Directly Allocated Costs
REMEMBER No pre-defined way to allocate costs Must be reasonable and accurate reflect causal/beneficial relationship For central payments made by a home office on behalf of a segment CAS
9904.403-40(b)(4): Allocated directly to segments to the extent that they can be identified Items not identifiable to specific segments should be allocated to
benefitted segments using a base that represents the factors on which the total payment was based.
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Conclusion
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Change could be coming your way
The flexibility of the system
Know your options
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Q&A
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Open to audience
www.twitter.com/deltek
www.facebook.com/deltekinc
www.linkedin.com/company/163414
www.youtube.com/user/deltekinc
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Call to action
April 12, 202325
Visit the Meet the Experts in the Solution Pavilion
Reach me by email or phone
[email protected] (703) 867-7189