Cost Accounting

Reliable and accurate Cost Accounting is critical to obtaining, maintain and executing government contracts successfully and profitably.

It is crucial for contractors to maintain adequate internal controls to ensure that their accounting records are current, accurate and complete.  Accounting records must be kept according to applicable Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS) and industry requirements while reflecting the nature of the cost of all transactions.  The cost accounting must also create an adequate audit trail for the inevitable government cost audits.

The cost accounting system should provide reasonable assurance that the contractor is able to adequately estimate, accumulate and report costs, including costs that are unallowable under applicable FAR and FAR supplements.All transactions must be appropriately authorized and corresponding records and reports must accurately reflect the contractor’s estimating, accumulating and reporting practices.

 

Cost accounting under government contracts require the ability to:

  1. Identify and segregate indirect overhead costs from direct contract costs.
  2. Account and report for direct costs by individual contract, contract line item number (CLIN) and sub-line item number (SLIN).
  3. Allocate indirect overhead costs to contracts based on an equitable and documented process where all contracts are treated the same.
  4. Identify and remove unallowable costs as defined in FAR Part 31.
  5. Track employee’s time related to government contracts.
  6. Maintain and adhere to policies and procedures including a Code of Ethics.

 

CGS leverages its expertise in government cost accounting to ensure that our clients are well equipped to handle the cost accounting requirements of government contracts thereby helping to ensure that they are well positioned for success. Additionally, we can offer guidance on designing and implementing cost accounting systems.

 

Please contact us to learn how we can help to ensure that your cost accounting will meet the government’s requirements and pass the government audits.