Accounting
Master the art of timekeeping for government contracting compliance
U.S. government contracts account for over
Understanding and adhering to the diverse yet interconnected government requirements and regulations is not just about fulfilling a contractual obligation, but is central to maintaining the integrity and credibility of government contracting.
For government contractors, meticulous timekeeping is not just a practice but a mandate, governed by a complex web of regulations and guidelines. By delving deeply into each of these requirements and providing a detailed analysis and guidance on compliance, a comprehensive framework emerges, ensuring contractors’ compliance with federal standards and enhancing the transparency and accountability of government-funded projects.
The multifaceted requirements of timekeeping for government contractors is detailed in key documents, such as the
At the heart of these requirements lies the necessity for precise and daily recording of labor hours. This foundational aspect, outlined by the CAM and
Equally critical is the implementation of robust work authorizations. These authorizations, including specific identifiers and detailed descriptions, must be clearly communicated to employees. This practice not only aligns with DCAA guidelines, but also establishes a clear linkage between the employee’s work and specific contract objectives, enhancing the traceability and accountability of labor charges.
The system’s integrity is further reinforced through strict authentication measures for timesheet access. As per CAM guidelines, each timesheet must be uniquely linked to an individual employee, prohibiting shared access and ensuring the recorded time is reliably attributable to the correct person.
Changes to time entries are inevitable, yet they must be managed with a rigorous audit trail. This audit trail, as described by the CAM and DCAA Info, must capture all initial entries, subsequent changes and include detailed justifications for each alteration. This level of scrutiny ensures any modifications to time records are transparent, verifiable and justifiable.
Employee certification and supervisor approval processes are pivotal in this ecosystem. Employees are required to certify their timesheets accurately reflect the hours worked, aligning with the CAM and DCAA Info directives. Similarly, supervisor oversight is a critical check in the process, ensuring the timesheets are thoroughly reviewed and cosigned, adding an extra layer of verification.
In scenarios where employees are absent or on travel, the guidelines provide clear directives for timesheet preparation and subsequent verification upon the employee’s return. This aspect underscores the system’s flexibility, while maintaining its rigor.
The integration of timekeeping data with the general ledger, as stipulated by DFARS and the Standard Form 1408 Preaward Survey, ensures a seamless flow of information from time recording to financial reporting. This integration is vital for maintaining accurate and current project cost records, facilitating timely and accurate billing and financial management.
The system must also be equipped to withstand DCAA floor checks, demonstrating that time is charged appropriately, and adjusted entries are well-documented and approved, as outlined in DFARS. This readiness for audit and inspection is a testament to the system’s robustness and compliance orientation.
Finally, record retention policies, as detailed in FAR, dictate the preservation of payroll-related records both during and after the completion of work. This practice not only serves as a historical record, but also as a crucial resource for audits and reviews.
Here are the specific practices that underpin timekeeping compliance and accountability in government contracting:
- Timekeeping mandate;
- Work authorizations;
- Authentication and timesheet integrity;
- Daily recording of labor;
- Audit trails for time entries
- Employee certification and supervisor approval;
- Supervisor completion of timesheets;
- General ledger integration;
- DCAA floor checks;
- Record retention policies;
- Direct and indirect cost segregation;
- Cost accounting and unallowable costs.
Government contracting timekeeping demands meticulous adherence to regulations and practices outlined in this guide. From work authorizations and authentication measures to audit trails, each component ensures compliance and accountability. Embracing these practices is essential for contractors to comply with federal standards and to be paid for their work. In this regulated environment, mastering timekeeping is fundamental for success.
The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
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