SF1408 PreAward Survey Assessment - One Contractors Completion

Introduction

A self-assessment given to auditors assist in the determination of an adequate accounting system under a pre-award survey (SF1408)

Contractor Self-Assessment

GOVC Consulting’s Accounting System adequately accumulates, segregates, and reports costs under government contracts. To illustrate the adequacy of the Accounting System as well as the applicable controls, policies, and procedures, the points addressed in this Overview are derived from the Preaward Survey of Prospective Contractor Accounting System (SF 1408)

SF 1408 Requirement – Proper Segregation of Direct Costs From Indirect Costs

Costs are segmented as direct and indirect costs per a written policy (Criteria for Classification and Accounting for Direct and Indirect Charges). Within the chart of accounts (COA), Chartfield Codes indicate classification that determines whether a charge is treated as a direct or indirect cost. The COA includes five (5) basic Chartfield Codes as follows: Business Unit, Location (department), Product, Account, and Book Type. Additional coding includes: Client, Project (engagement), CPFF indicator, or Fee Arrangement/Contract Type. The Book Type and Project coding determine classification as direct or indirect costs in accordance with the defined values.

SF 1408 Requirement – Identification And Accumulation of Direct Costs By Contract

Direct costs are identified/accumulated by engagement and posted to a WIP Report. Direct costs are identified by the assigned COA values. The system captures by Account and Project the following: direct labor Compensation/Costs of Service (and hours) and expense reimbursements by employee, Subcontracts, and Other Direct Costs (ODCs). Detail regarding costs specific to a project are identified in the Work in Process (WIP) Details Report.

SF 1408 Requirement – A Logical And Consistent Method For The Allocation Of Indirect Costs To Intermediate And Final Cost Objectives

Indirect costs are allocated to engagements as a factor applied to direct costs. The rates used for government contract reporting are calculated in an off-line process in accordance with our CASB DS-1 Disclosure Statement and FAR Contract Cost Principles.

SF 1408 Requirement – Accumulation Of Costs Under General Ledger Control

Costs are accumulated under general ledger control. Employee costs are tracked and charged via the automated time and expense system (TIMEnX). Each semi-monthly accounting cycle, TIMEnX data is extracted for posting to the General Ledger (G/L) at a summary level in accordance with the organizational COA structure and to the Engagement Accounting (EA) application at the detail level. Accounts Payable (A/P), Accounts Receivable (A/R), and other G/L entries are also extracted for posting semi-monthly to the G/L in summary and EA in detail.

SF 1408 Requirement – A Timekeeping System That Identifies Employees’ Labor By Intermediate Or Final Cost Objectives

An automated timekeeping system tracks employees’ labor by engagement. Each employee has a cost of service rate. When an employee completes time and expense reporting via TIMEnX, the data captured within the system is posted to a WIP Report for the project charge number referenced. Written procedures and training are deployed to ensure accurate recording of labor charges on a daily basis. Written procedures and guidance for labor and related charges include the following:

• Government Contracting Compliance Requirements Policy • Time Accounting Policy - TIMEnX Key Points • Accounting for Labor Costs Policy • Expense Charging – TIMEnX Key Points • TIMEnX Time and Expense Approval Policy • TIMEnX Time and Expense Adjustments • TIMEnX Time and Expense Adjustment Policy and Procedures Matrix

SF 1408 Requirement – A Labor Distribution System That Charges Direct and Indirect Labor To The Appropriate Cost Objective

A WIP Details Report serves as the job order accounting system and is used to charge direct and indirect labor to an engagement/contract. All entries into TIMEnX are verified as being charged to valid Project numbers. Each Project number is assigned to a set of COA Chartfield Codes that determine classification as direct or indirect costs in accordance with the defined values.

SF 1408 Requirement – Interim (At Least Monthly) Determination Of Costs Charged To A Contract Through Routine Posting Of Books of Account

A determination of costs is charged to an engagement/contract through routine posting on a monthly basis. Engagement costs are extracted and posted to projects each semi-monthly cycle.

SF 1408 Requirement – Exclusion From Costs Charged To Government Contracts Of Amounts Which Are Not Allowable In Terms Of FAR 31, Contract Cost Principles And Procedures, Or Other Contract Provisions

Unallowable costs are identified and excluded from costs charged to government contracts. Unallowable costs are identified in the accounting system by certain account and/or project charge numbers established. Employees charge unallowable costs to the appropriate project number and expense category via TIMEnX. These same unallowable account and/or project charge numbers are used for coding of A/P transactions. Written procedures and training are deployed to ensure accurate recording of unallowable costs. Written procedures and guidance include the following:

• Accounting for Unallowable Costs Policy • GOVC Expense Reimbursement Policy - Public Services Addendum • Penalties for Mischarging Policy

SF 1408 Requirement – Identification Of Costs By Contract Line Item And By Units (As If Each Unit Or Line Were A Separate Contract) If Required By The Proposed Contract

Costs by delivery order can be identified if required by contract. Separate project numbers are established to correspond to contract line items and/or task orders.

SF 1408 Requirement – Segregation Of Preproduction Costs From Production Costs

Summary

GOVC Consulting’s Accounting System adequately accumulates, segregates, and reports costs under government contracts in accordance with the Preaward Survey of Prospective Contractor Accounting System (SF 1408).