DCAA Accounting: What you need to know

DCAA Accounting: What you need to know

Interested in becoming a Department of Defense (DoD) Contractor? If so, you need to know about DCAA accounting.

What is the DCAA?

DCAA Logo - Sousa & WeberThe Defense Contract Audit Agency (DCAA) performs contract audits for the DoD and provides accounting and financial advisory services regarding contracts and subcontracts to the Department of Defense and other federal entities responsible for acquisition and contract administration. DCAA operates under the authority, direction, and control of the Under Secretary of Defense (Comptroller)/Chief Financial Officer.

Think of the DCAA as the DoD Accounting/Financial group. The DCAA independently investigates Department of Defense (DoD) contracts to determine the fairness, accuracy and completeness of financial records and reports, as well as the effectiveness of any transactions the department has made. In other words, the DCAA reviews business deals to make sure everything is correct and acceptably efficient.


DCAA’s most common activities are

  • accounting system reviews to make sure that private companies  can meet requirements of federal contracting rules
  • pre-award surveys
  • financial capabilities reviews to make sure that the contractor has the financial strength and backing to perform on a contract
  • floor checks – timesheet audits conducted in person by a DCAA auditor
  • and incurred costs audits where contractors have submitted details of their actual indirect rates for a fiscal year.

Adequate accounting system

The DCAA reviews the accounting practices and accounting of government contractors. According to the DCAA, an adequate accounting system

  • has centralized data
  • contemporaneous transactional processing
  • adequate segregation of duties
  • ability to track costs by direct, indirect (by cost pool and base) and unallowable costs
  • and tracks direct costs by federal award or commercial activity (job costing).

The main goal is to decrease errors in accounting and the risk of under-/overcharging the government.


The DCAA performs an audit or pre-award survey of a government contractor by assessing the contractor’s compliance with the Federal Acquisition Regulations (FAR). The FAR is the principal set of rules in the Federal Acquisition Regulation System.

What does it all mean?

The DCAA is the Federal government agency that you’ll need to become very familiar with if you are a private firm looking to get involved with any type of Department of Defense contract.  The DOD hires thousands of private companies every year to work on many different projects that support the military.

Sousa & Weber is your source for DCAA accounting support, guidance and information. Read about our DCAA Accounting services and  Contact us for more information.

By |2015-10-19T19:37:47+00:00October 19th, 2015|Accounting Tips, DCAA Accounting|Comments Off on DCAA Accounting: What you need to know

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