In this blog post, we will talk about the importance of having an approved accounting system as a government contractor and how it plays a key role in staying compliant with Generally Accepted Accounting Principles (GAAP), Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS) and rules and regulations set forth by the Defense Contract Audit Agency (DCAA).

Let’s start with the basics; compliance is a set of rules, standards, and procedures that companies must follow to meet regulatory and contractual requirements. Government contractors are subject to various laws and regulations set by regulatory agencies. These rules are intended to protect the government and ensure that contractors accurately accumulate and bill allowable costs to its government customers.

As contractors grow and aim to perform cost-reimbursable work, they are required to go through a pre-award survey of their accounting system (Standard Form 1408). During this process, an examination is conducted to determine whether the contractor is using accrual basis of accounting, proper cost segregation, indirect cost allocation, proper timekeeping procedures and accurate project accounting. This is the first step towards having an approved accounting system.

Once contractors pass their pre-award survey, a post-award system audit is performed. The areas audited are the same as the ones examined during the pre-award process. An extensive testing of transactions is performed in conjunction with accounting processes and procedures. The process from start to end usually takes between two and three months. If approved, the certification is valid for several years and can be used in future proposals.

Now, let’s talk about how Unanet plays a role in compliance and certification for accounting systems. Unanet offers a cloud-based software solution for project management, resource planning, and accounting. Unanet’s accounting system is compliant with FAR and DCAA requirements and meets the DCAA’s accounting system requirements (ASR) for a pre-award accounting system adequacy review and post-award audit. Unanet’s robust cost segregation and job reporting capabilities provide contractors with the tools they need to efficiently run their jobs and stay in compliance.

Arrative’s team specializes in implementing Unanet and providing all the support contractors need to navigate all compliance, audits, and submission requirements. Our consultants will tailor the system setup to optimize its use based on the contractor’s needs and line of business. Once implemented, our consultants support clients through the certification process, interaction with DCAA personnel, provisional rate, and incurred cost submissions. We aim to become a true business partner and provide all the back-office support needed by our clients so that they can focus on running and growing their business!