DCAA Compliance & Audit Support

Audit-Ready Systems, Documentation, and Strategy for Every Federal Contractor

Protect Your Contracts with Proven Audit Support

When you work with the federal government, DCAA compliance isn’t optional—it’s fundamental to your eligibility and reputation. Even a minor oversight in your accounting system, timekeeping, or indirect cost allocation can draw audit findings, delayed payments, or worse—disallowance of costs.

At Peter Witts CPA PC, we’ve spent more than 20 years helping contractors navigate the Defense Contract Audit Agency (DCAA) process with confidence. From pre-award surveys to incurred cost submissions and field audits, we know what auditors look for and how to help you meet every requirement without disrupting daily operations.


Our goal is simple: help you build a compliant foundation that not only passes audits but also supports long-term profitability and growth.

Why DCAA Compliance Demands Specialized Expertise

DCAA auditors evaluate the adequacy and consistency of your accounting systems against FAR Part 31, DFARS business system criteria, and Cost Accounting Standards (CAS). Even if your team is experienced in GAAP accounting, government contracting introduces additional layers of scrutiny:


Systems must segregate direct and indirect costs in alignment with approved rate structures.


Labor costs must be accurately tracked, approved, and allocated at the project level.


Indirect rate applications must be defensible, consistent, and reconcilable to supporting schedules.


Incurred cost submissions (ICE) must be timely, complete, and mathematically accurate.


Every transaction must meet documentation standards that allow auditors to verify allowability and allocability.


Our specialists translate these complex rules into practical systems and day-to-day processes—so your accounting function stays compliant without slowing your business down.

Pre-Award System Reviews & Readiness

Before you can be awarded a cost-type contract, the DCAA will often perform a Pre-Award Accounting System Survey (SF 1408) to determine if your system is adequate. We help you:

  • Evaluate your chart of accounts, cost pool structure, and timekeeping systems for DCAA adequacy.
  • Develop written accounting and labor policies that satisfy FAR Part 31 cost principles.
  • Prepare your team for auditor interviews and system demonstrations.
  • Remediate any deficiencies prior to submission or audit scheduling.

Passing the pre-award review isn’t just about compliance—it positions your company for growth by proving your financial systems can handle complex, federally funded projects.

Post-Award Audit Support

Once awarded, your accounting and internal controls will continue to be evaluated throughout the contract lifecycle. Our audit support services include:

  • Representation and communication with DCAA or DCMA auditors.
  • Review and organization of supporting documentation for cost allowability and allocability.
  • Responses to audit findings, including questioned costs and disallowed expenses.
  • Corrective action plan development for business system deficiencies.
  • Strategic remediation to prevent repeat findings in future audits.

We act as your liaison and defense team, ensuring that your documentation, responses, and financial practices are defensible and transparent.

Incurred Cost Submission (ICE) Assistance

Under FAR 52.216-7, cost-reimbursable contractors must submit an adequate final incurred cost proposal within six months after fiscal year-end. DCAA’s ICE model is detailed and unforgiving; even minor inconsistencies can trigger rejections or additional review.

Our team prepares and validates your ICE submission to ensure it meets adequacy standards:

  • Accurate tie-outs between general ledger, cost pools, and Schedule H/I/I-1 reports.
  • Proper classification of unallowable costs under FAR 31.205.
  • Reconciliation of billed vs. actual indirect rates and contract totals.
  • Documentation of indirect rate computations and a signed Certificate of Indirect Costs.

We ensure your ICE package is submission-ready and audit-defensible, minimizing follow-up questions and payment delays.

Timekeeping and Labor Compliance

Labor costs are often the single largest expense on federal contracts—and the first area auditors review. We help ensure your timekeeping and payroll systems are both accurate and compliant:

  • Implementation or review of DCAA-compliant timekeeping tools.
  • Daily time entry, supervisor approval, and correction audit trails.
  • Labor distribution and reconciliation to the general ledger.
  • Payroll allocation and classification by project, funding source, and labor category.

By aligning labor reporting with project accounting, we help you maintain credibility during audits and protect your cost recovery.

Our professionals include former DCAA auditors and government accounting specialists who understand both the letter and the intent of the regulations. We know how to structure policies, controls, and reports that satisfy auditors and keep your projects funded.

Scalable Support Built Around Your Contract Structure

Every client engagement begins with an onboarding process where we learn your business, review contract structures, assess system readiness, and set up workflows aligned with your funding source. Our team then delivers consistent monthly service through secure platforms and regular check-ins.

Depending on the size and scope of your business, outsourced services can be delivered through the following CFO packages:

  • The General — Baseline support with optional bookkeeping add-ons
  • The Squadron — Monthly closings and light controller support
  • The Platoon — Embedded transaction support, reconciliations, and reporting
  • The Battalion — Full-scope outsourced accounting with strategic CFO oversight