DCAA is a stickler for compliance and employee timekeeping is no exception. The goal of DCAA is to ensure that government contracts meet a certain standard and that the taxpayer is getting good value for their money. Audits are prevent any fraudulent billing to the government.
The process for documenting employee work hours is important. Often there is no paper trail to record how or when the time is recorded. This reason alone is why the timesheet audit log is one of the key features in any DCAA timekeeping solution.
Many organizations have tools that record billable or direct labor time daily. What is most often is overlooked is the ability to track both direct and indirect cost. Small businesses commonly do not know what the time keeping system requirements are or are provided incorrect information in regards to DCAA timekeeping compliance. Please refer to the list of key requirements below to ensure your government contract is ready for a DCAA (defense contracting auditing agency)
Recording employee time daily is crucial for accurately tracking work hours, streamlining payroll processing, and ensuring compliance with labor regulations. This practice also allows us to monitor productivity and identify any discrepancies in work schedules.
Employees are required to accurately account for all hours worked, which includes both billable hours that can be charged to clients and non-billable hours that are essential for internal operations or administrative tasks. This ensures transparency and helps in tracking productivity effectively.
Employees are required to accurately record their own working hours to ensure proper tracking of time spent on various tasks and projects. This practice not only helps in maintaining accountability but also aids in efficient payroll processing and project management.
Employees are required to sign or “submit” each timesheet to ensure accurate tracking of their hours worked and to maintain proper records for payroll processing. This step is crucial for verifying that all hours are accounted for and that employees receive the correct compensation for their efforts.
Employees should not be permitted to enter or charge time to billable job codes in advance, as this practice can lead to inaccurate billing and financial discrepancies. It is essential to ensure that all time entries reflect actual work completed to maintain transparency and integrity in our billing processes. This policy helps us to uphold proper accounting standards and provides a clearer picture of project timelines and resource allocation.
Employees are required to accurately record all leave time to the appropriate accounts, which include sick leave, paid time off (PTO), holidays, and vacation days. This ensures that the organization can effectively manage employee benefits and maintain accurate records for payroll and compliance purposes. Proper documentation of leave time is crucial for both the employees and the employer to track and understand time off taken throughout the year.
Employees must have access to record correction time cards with a documented audit trail. All timesheet changes must capture a detailed log including a time and data stamp of each edit made.
Each timesheet must be signed my a supervisor and/or manager within your organization to verify the accuracy of employee time records. In addition, supervisors are responsible for:
Reviewing and approving each employee’s timesheet before it is submitted for payroll processing.
Ensuring that all hours worked and leave time taken by their team members are accurately recorded.
Monitoring employee work schedules and addressing any discrepancies or issues promptly.
Communicating with employees regarding any changes to their assigned charge codes.
Ensuring that employees adhere to company policies and procedures related to timekeeping.
Providing necessary resources and support for employees to accurately record their working hours.
Companies are required to thoroughly document and effectively communicate timekeeping procedures to each employee to ensure clarity and compliance. This includes providing comprehensive written guidelines that detail how time should be recorded and submitted.
Company administrators are responsible for initiating all project names or job codes that appear in the system, ensuring that each project is distinctly identified and easily accessible for tracking purposes. This step is crucial for maintaining organized records and facilitating accurate billing and reporting.
Companies are mandated to provide timekeeping training to both employees and supervisors. This training should cover the importance of accurate time reporting, the procedures involved, and the implications of non-compliance, thereby empowering staff with the knowledge they need to fulfill their responsibilities effectively.
It is essential that companies retain employee time sheets for a minimum of 3 years in order to comply with labor regulations and provide a historical record for audits. This retention policy not only helps in maintaining accurate payroll records but also serves as a reference in case of disputes regarding hours worked.
To ensure ongoing compliance with established policies, companies should conduct periodic monitoring of adherence through routine floor checks. These checks can help identify any discrepancies in timekeeping practices and allow for timely corrective measures.
Additionally, measures must be implemented to protect sensitive information related to project codes. Access to these codes should be limited strictly to employees who have been approved to work on a given project, safeguarding company resources and maintaining the integrity of project management.
If your company wins a government contract, the DCAA compliant timekeeping rules apply to everyone in the company. It doesn’t matter how large your operations are, it’s important that you are compliant. It’s your responsibility to ensure that you are compliant to the rules above.
Proper timekeeping is essential in managing payroll, ensuring compliance with labor regulations, and maintaining accountability within an organization. Employees have the responsibility to accurately record their work hours and leave time, submit timesheets, and follow policies that prevent premature billing. Supervisors must review, approve, and verify the accuracy of timesheets, address discrepancies, and support their team in adhering to timekeeping procedures. Companies are obligated to document these processes clearly, provide necessary training, and secure project codes. Consistent monitoring and a three-year retention policy are vital to uphold compliance and facilitate audits.