Hi Mr. Gunn, I am currently working with a firm as the new accounting person. They attended one of your workshops. I come from the private industry and have not done government accounting outside of what I learned in school some time ago.
We are trying to get in compliance with DCAA and I was working on setting up the chart of accounts. Would the chart of accounts I have attached be in be in compliance with the DCAA? I did watch your Cost and Pricing Workshop Part 1 DVD and what a great tool! I am trying to ensure that I am going in the right direction so that we will be in compliance with the next audit.
Thanks in advance
Well, it looks like you learned a lot from the watching the DVD because after a brief review of your COA, you are on the right track! The account descriptions themselves are generally tailored by each company, but many of them are standard in accordance with GAAP (see the sample chart of accounts in the Handouts & Exercise companion workbook to the DVD, or on the electronic copy (Both are in your firms’ possession as part of the COMPASS Pack). The descriptions for many of the accounts are industry standards. The fact that there is more than one of the same account description is somewhat unique to government contract accounting.
Remember, the main difference between Non-Government and Government Contract Chart of Accounts is “How They Are Grouped”. So you can use the same/similar description of the accounts, based on when a cost will be charged to Overhead versus G&A. This decision will be based on experience, some judgment, and the reason for the expense being incurred at the time.
However, the “General” description of a cost to Overhead or G&A is outlined under the “Terminology Section” of the Companion Workbook and on the DVD. Try to use the word “generally” when describing your policies. For example, “Costs related to support more than one contract that are not charged direct to a contract are generally charged to overhead. These include……….. (and give a list of what some of those costs are). Costs for the general and administration of the company as a whole are generally charged to G&A.” (You can see a list of costs typically charged to overhead and G&A in the companion workbook. These are only guides and not all-inclusive).
Also remember, this is not an exact science. It is a bit of an “Art”. Welcome to the wonderful world of government contracting!!!
I am glad the DVD was helpful? Many of your peers have a copy also. Remember to use the companion workbooks to follow along.