Government Contract Accounting
Financial clarity for federal contracts, grants, and government-funded growth.
Play It Safe with Your Government Contracts—Don’t Leave Compliance to Chance
When your business enters into an agreement with the federal government, the accounting stakes immediately rise. Even minor missteps in your cost structure, invoicing, or internal controls can trigger audits, funding delays, or even disqualification from future awards.
At Peter Witts CPA PC, we provide comprehensive government contract accounting services built around FAR, CAS, and DCAA compliance. Whether you’ve just won your first contract or are managing a portfolio of multi-year federal awards, we help you build audit-proof systems, track allowable costs, optimize indirect rates, and prepare for long-term success.
Why Government Contract Accounting Requires Specialized Expertise
Government contract accounting is not standard bookkeeping with more reporting. It is the financial framework that helps your organization price work properly, support costs, bill accurately, and show that federal funds are being managed responsibly.
Depending on your contracts or awards, your accounting may need to support:
- FAR and DFARS requirements
- Cost Accounting Standards
- DCAA audit expectations
- NIH, DOE, DoD, and other agency requirements
- Direct and indirect cost tracking
- Allowable and unallowable cost documentation
- Labor distribution and timekeeping
- Cost proposals and incurred cost submissions
Accounting System Design for Government Contractors
A strong accounting system should make every federal dollar traceable — where it was budgeted, how it was spent, which project it supports, and whether it is allowable.
We help contractors and federally funded organizations design and implement accounting systems that:
- Separate direct, indirect, and unallowable costs
- Track labor and expenses by contract, grant, or project
- Support fringe, overhead, and G&A cost pools
- Produce financial reports for both leadership and agency review
- Maintain documentation for DCAA, federal agencies, and prime contractors
We work with platforms such as QuickBooks, Deltek, Unanet, and other systems depending on your award structure, reporting needs, and growth stage.
Incurred Cost Submission (ICE) Preparation
An incurred cost submission is more than an annual compliance requirement. It is a test of whether your accounting records, indirect rates, billings, and supporting documentation tell a clear and defensible financial story.
Peter Witts CPA PC helps cost-reimbursable contractors prepare incurred cost submissions with the detail and organization needed for agency review, including:
- Cost pool support
- Final indirect rate calculations
- Contract billing reconciliation
- Supporting schedules and documentation
- Certificate of indirect costs
- DCAA ICE Model preparation, when applicable
Our goal is to help you submit with confidence and reduce the risk of delays, questions, or avoidable audit issues.
Cost Proposal Development & Support
A strong technical proposal still needs a strong financial structure. The way your costs are priced, explained, and supported can affect both award competitiveness and future compliance.
We help businesses develop cost proposals that are realistic, defensible, and aligned with federal expectations, including:
- Labor, fringe, overhead, and G&A calculations
- Indirect rate models
- Budget narratives and pricing justifications
- Forecasted expenses
- Cost support documentation
- Proposal compliance review
Whether you are pursuing work with DoD, NIH, DOE, or another federal agency, we help strengthen the financial side of your submission so your proposal is built for both review and performance.
DCAA Compliance & Audit Support
DCAA compliance works best when it is built into daily accounting practices before an audit notice arrives. Your records, systems, timekeeping, cost pools, and supporting documentation should be prepared to answer questions before they are asked.
With first-hand DCAA knowledge and decades of government contract accounting experience, Peter Witts CPA PC helps clients with:
- Pre-award and post-award readiness reviews
- Accounting system assessments
- Audit preparation and documentation support
- Cost allowability guidance
- Indirect rate and cost pool analysis
- Support with questioned costs or audit findings
We help clients approach compliance with structure and confidence, while keeping the larger goal in focus: building a financial foundation that supports federal funding and long-term growth.
Government contract accounting should do more than protect your business from compliance issues. Done well, it gives leadership clearer pricing, stronger documentation, better cash-flow visibility, and the confidence to pursue larger federal opportunities.
Frequently Asked Questions
What is “government contract accounting,” and how is it different from regular accounting?
Government contract accounting involves following specific federal rules, standards, and compliance requirements (e.g. cost allowability, audit readiness, indirect rates, DCAA standards). Unlike general accounting, your financial systems need to withstand audits, cost proposals, and strict oversight. We structure your accounting and reporting so you stay compliant and reduce risk.Do I need to worry about DCAA audit compliance?
If you hold or are bidding on U.S. federal contracts (especially cost-reimbursable, time & materials, or fixed price with cost elements), the Defense Contract Audit Agency (DCAA) may audit your accounting systems. We can help you build or review systems so you pass audits when they arrive.Can you help with indirect cost rates, cost proposals, and incurred cost submissions?
Yes — we support designing indirect cost rate structures, preparing cost proposals, and submitting incurred cost reports. These are critical tasks in government contracting, and we ensure your supporting records align with regulatory expectations.How much experience do you have in the federal contracting space?
Peter Witts CPA PC has over 36 years of experience in government contract accounting, including first-hand DCAA knowledge. We’ve worked with clients across DoD, NIH, DOE, and other agencies, helping them navigate the compliance landscape.What kind of businesses or projects do you work with?
We work primarily with companies engaged in federal contracts or grants (especially research, development, support services). If your business isn’t in that space, we’ll help you determine whether our services are the right fit or recommend alternatives.How do I get started with you?
You can schedule a free consultation via our website. During that call we’ll explore your current standing, challenges, and needs, and map out how we might support you. (Then we’ll formalize scope, pricing, and next steps.)What should I provide for an initial assessment?
Financial statements, accounting policies, prior audits (if any), contracts and grant agreements, cost accounting structure, payroll records, indirect cost allocations, and any compliance documents. We’ll review what you have, identify gaps, and propose next steps.How often will we interact / how do you deliver services?
That depends on the scope. For outsourced accounting, we could work on a monthly or quarterly basis. For compliance or audits, we may engage more intensively. We'll agree up front on communication frequency, deliverables, and review cycles.What are your fees or how is billing handled?
Our fees are fixed monthly fees and depend on the complexity and scope of your work — number of contracts, volume of accounting entries, compliance risk, etc. We’ll provide a proposal after our initial assessment. We only work on an hourly basis for audit support services for audits relating to government contracts or grants conducted by government agencies or outside CPA firms.What if my business is outside of your specialization—can you still help?
At Peter Witts CPA PC, we focus exclusively on our core strength: federal contract and grant compliance. We serve businesses operating within the government contracts and grants space, offering specialized outsourced accounting and tax services tailored to the unique requirements of this industry. This is our sole focus — we don’t try to be everything to everyone. Our expertise is deep, not broad, and it’s dedicated to helping government contractors navigate complex compliance and maximize their opportunities.What happens if there's a federal audit or examination?
We support audit responses, documentation requests, and work with your team to ensure you respond properly. Because we build systems with compliance in mind, we aim to minimize surprises and help you maintain defensible records.How do you keep up with changing federal regulations and compliance standards?
We continuously monitor federal regulatory updates (DCAA rules, OMB circulars, FAR/DFARS, audit guidelines) so our clients’ accounting systems remain in alignment with best practices and compliance requirements.
