What Are the DCAA Timekeeping Requirements? Here's How to Pass the Audit.
Executive Summary:
DCAA does not certify timekeeping software. It audits whether your people record time the way your written policy says: every day, in their own hands, to the right charge code, with every correction explained. Here is what that means, the mistakes that fail small contractors, and how EnterYourHours (EYH) handles each.
DCAA Daily Time Entry Rules
The rules are short. The DCAA floor check tests them: an auditor shows up unannounced and asks employees what charge code they are on and when they last entered time.
- Employees record their own time, every day, by the end of the day.
- Time is never charged in advance of the work.
- All hours worked, including uncompensated overtime for salaried staff.
- Hours go to the code for the work actually performed, not the one with budget left.
- Actual time, not estimates. Exactly 8.0 hours a day, every day, tells an auditor the timesheet came from the calendar.
“The floor check is the whole audit in miniature,” said Jared Freedman, CEO, Orbital Bridge. “They ask an engineer what charge number he’s on and when he last entered time. If he has to think about it, you have a finding.
EYH is built for entry as the day happens: timers that run while the work is in progress, required fields that reject incomplete entries, and a creation timestamp on every entry, so a Friday-afternoon pattern is visible to a manager before an auditor sees it.
What Makes a Timesheet DCAA Compliant?
DCAA does not prescribe a layout. FAR 31.201-2 makes you responsible for records “adequate to demonstrate that costs claimed have been incurred,” and DFARS 252.242-7006 requires a timekeeping system that identifies labor by cost objective. A passing timesheet shows:
- Employee, date, and hours by charge code: a direct contract, or an indirect pool such as overhead, G&A, B&P, or leave. Never a catch-all “admin” code.
- All hours worked, paid or not: total time accounting, which spreads labor rates across the hours really worked.
- A description that supports each charge.
- The employee’s certification and a supervisor’s approval.
- Corrections that keep the original, record the reason, and show who changed what and when.
- A unique login per user, with charge codes limited to the ones each employee is assigned.
- A labor distribution report that reconciles timesheet hours to payroll and to the invoice.
In EYH, client, project, and activity are the charge code, and Activity Mapping keeps the wrong code off each employee’s list. Every edit is logged; Adjust Billable Time keeps the original hours and the reason beside each correction. Certification lives in the bill batch: restrict that permission to one person and EYH records who created each batch. Payroll batches produce the labor distribution from the same hours.
Common DCAA Timekeeping Audit Failures
The findings repeat from one small contractor to the next:
- Timesheets completed at week’s end from memory, or filled in ahead of time.
- A supervisor or office manager entering employees’ hours.
- Corrections with no reason recorded and no trail of who made them.
- Flat 8.0-hour days and 40.0-hour weeks that never vary.
- Uncompensated overtime left off the timesheet.
- One broad indirect code that everything non-billable falls into.
- A written policy nobody follows, and no record that anyone was trained on it.
“Every finding I’ve seen on a small contractor came down to the same thing,” Freedman said. “The timesheet got filled in on Friday from memory. Daily entry is the requirement everything else hangs on.”
How EnterYourHours Fits Into DCAA Timekeeping
No timekeeping software is DCAA certified. DCAA audits your software, your policy, your supervisors, and your employees together. EYH’s share is capture as the day happens, charge codes under control, every change logged, one certifying step at the bill batch, and reports that trace from timesheet to payroll to invoice. It is the timekeeping and billing front end for a small government contractor, not a replacement for your accounting system or your policy.
Timekeeping that holds up to an audit
EnterYourHours is time tracking and billing software for firms that bill by the hour and answer for every one. Click here to start a free trial or request a demo.
Sources
- 48 CFR 31.201-2, Determining allowability (eCFR)
- DFARS 252.242-7006, Accounting System Administration (Cornell LII)
- DCAA Timekeeping Requirements for Government Contractors (Cherry Bekaert)
- Five Steps to DCAA Timesheet Compliance (Warren Averett)
- Uncompensated Overtime: What Your Records Have to Show (TimeRewards)