DCAA Compliance· · 4 min read
How to Prepare Your Team for a DCAA Floor Check
A DCAA floor check tests your employees, not just your books. Here is what auditors ask, what they listen for, and how to prepare your team with a mock floor check.
A floor check tests your employees, not just your books. It is one of the few audits where an unprepared team, not an unprepared system, is what trips a contractor up. Here is how to get your people ready.
A floor check is a live check: on a cost-reimbursable contract with an incurred cost audit, the DCAA will at some point talk to your employees directly about what they are working on and what they are charging. For what the audit looks like from the company's side, see our guide on what to expect during a DCAA floor check. This article is about the part you can most improve, preparing the people who will answer.
What the Auditor Is Actually Checking
A floor check combines two things: your records and your people. Before speaking to anyone, the auditor looks at whether time is being posted when it should be. Time is supposed to be recorded at least daily, so if they arrive on a Thursday and the charges for Monday, Tuesday, and Wednesday are not there, that is already a problem. Not filling out timesheets daily is among the most common findings.
Then they ask questions. The questions are straightforward: show us what you are charging, and what document you are working on. From there, the auditor may confirm your answer against the statement of work in the contract, to see that the work you describe is work the contract calls for. The underlying question, in the auditor's words, is how do I know you are charging the right number, and the burden is on the company to prove it.
Two Things Auditors Pay Special Attention To
Total time reporting. The DCAA expects all hours worked to be recorded, not only the billable forty. Recording every hour is the rule they are checking for.
Uncompensated overtime. Related to total time reporting, this is the question of what happens beyond the forty-hour week. If your timesheet says forty hours but you actually worked fifty, that gap matters, and if you truly worked fifty, how those hours are spread across cost objectives has to be handled correctly, especially when time is split across more than one contract.
Who the Auditor Talks To
For questions about your timekeeping controls, the auditor will speak with a controller or CFO. For the live check itself, they go to each individual employee. When the check is done virtually, a company representative can usually be present, and auditors tend to prefer it that way, so any dispute can be witnessed. These sessions may be recorded.
The Fix: A Mock Floor Check
Because a floor check tests people, the way to prepare is to practice with them. Walking your team through a mock floor check, using the same kinds of questions an auditor asks, is what turns a nerve-wracking interview into a routine one. Over-explaining is its own risk: an employee who volunteers that the company said to work eight hours but they really work fifty can create a finding where none needed to exist. A short rehearsal teaches people to answer the question that was asked, accurately and no more.
A short prep sheet covers the three questions that come up in almost every check. Tap a card to see what a good answer looks like:
How WiseCost Supports a Clean Floor Check
Much of what a floor check verifies is timekeeping discipline, and that is easier to hold up when the system enforces it. WiseCost provides daily timekeeping with a timesheet approval flow, records all hours against the right contracts and indirect categories, and keeps an immutable audit trail behind every entry. When an auditor asks an employee what they charged and to which contract, the record already agrees with the answer.
Get the DCAA audit-readiness resource. The DCAA Master Audit Program 17740 is the actual program a DCAA auditor follows for the pre-award accounting system review. See it paired with a one-page WiseCost version and an interactive readiness checklist in The DCAA Pre-Award Accounting System Review: What the Auditor Actually Checks.
You can also run our free DCAA Readiness Self-Assessment, or book a demo to see how WiseCost keeps timekeeping floor-check ready.
Based on the DCAA Ready webinar series, featuring Paul Calabrese, a former DCAA auditor (GRF CPAs & Advisors).