SBIR & STTR Program Financial Management
Specialized Accounting and Compliance Support for Federally Funded Innovators
Turn Your Innovation into Impact—Without Losing Funding to Compliance Gaps
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards fuel America’s most cutting-edge discoveries—but they also come with strict financial and reporting requirements.
At Peter Witts CPA PC, we help SBIR and STTR awardees build compliant accounting systems, manage cost tracking, and maintain audit-ready documentation that satisfies 2 CFR 200, FAR Part 31, and each agency’s supplemental guidance (NIH, DoD, NSF, DOE).
Our role is to help your team focus on research and commercialization—while we ensure every dollar of federal funding is allowable, allocable, and recoverable.
Why SBIR/STTR Awards Require Specialized Financial Oversight
Unlike private investment, SBIR/STTR funds are federal assistance. That means every transaction—from payroll to prototype materials—must withstand both programmatic and financial review.
Common pitfalls we prevent:
- Using commercial accounting software without FAR-compliant cost segregation.
- Inadequate timekeeping or uncertified labor allocations.
- Missing documentation for cost share or subcontracted research.
- Late or inconsistent Federal Financial Reports (SF-425) and drawdown reconciliations.
- Our systems are designed to meet Uniform Guidance (2 CFR 200 Subpart E) cost principles, FAR 31.201-2/-4 allowability and allocability tests, and CAS 401/402 consistency requirements—so your funding remains fully defensible.
Pre-Award Planning and Budget Development
We help startups and R&D firms establish compliant budgets before the award begins:
- Review solicitation and agency-specific cost instructions.
- Develop Phase I/Phase II budgets consistent with 2 CFR 200 §200.308 (budget revisions).
- Design indirect cost rate structures—either de minimis (10%) or custom pools for future NICRA negotiation.
- Prepare internal Accounting and Timekeeping Policies aligned with §200.302(b) internal-control standards.
- Build funding projections and cash-flow forecasts to avoid early burn-rate issues.
Our pre-award packages routinely pass sponsor review without revision.
Post-Award Accounting and Compliance
Once funded, we set up and operate accounting systems that withstand both DCAA and agency audits:
- Configure job-cost ledgers by project, task, and funding increment.
- Record and classify direct vs. indirect expenses per FAR 31.205.
- Integrate DCAA-compliant timekeeping with payroll for accurate labor distribution (§200.430).
- Track cost share, subawards, and participant support separately (§200.331–§200.332).
- Maintain drawdown reconciliations and quarterly SF-425 (FFR) submissions.
We also provide a
Grant Audit Binder—a single digital package containing ledger tie-outs, labor certifications, vendor support, and budget variance analysis for every reporting period.
Indirect Rate Strategy for SBIR/STTR Firms
Many small businesses start with the de minimis 10% indirect rate, but as funding grows, that approach limits recovery. We help you:
- Develop a compliant Fringe/Overhead/G&A structure for future awards.
- Prepare and submit Indirect Cost Proposals (ICPs) under Appendix IV to 2 CFR 200.
- Calculate Facilities Capital Cost of Money (CAS 414/417) where applicable.
- Support NICRA negotiations and Provisional Billing Rate Agreements (FAR 42.704).
This proactive approach increases allowable cost recovery and improves competitiveness in follow-on contracts.
Financial Reporting and Drawdowns
Each agency enforces unique drawdown and reporting processes. We manage them end-to-end:
- NIH: ACM$ drawdowns and quarterly progress financials in eRA Commons.
- DoD: WAWF submissions and cost-reimbursable voucher tracking.
- DOE / NSF: Payment Management System (PMS) drawdowns with reconciliation to project ledgers.
- All agencies: Preparation of SF-425/FFR reports, budget vs. actuals, and cash-on-hand calculations.
We maintain tie-outs from ledger to drawdown report—ensuring your totals are verifiable and defensible.
Audit Preparation and Closeout
Audit readiness begins on day one. We prepare and defend your financials during:
- Single Audits (2 CFR 200 Subpart F) or DCAA incurred-cost reviews.
- Agency-specific financial or technical closeouts (§200.344 – §200.345).
- Review of questioned-cost findings and corrective-action drafting.
Deliverables include:
- Audit Binder with all supporting documentation.
- Closeout Checklist verifying final drawdowns, property disposition, and cost-share reconciliation.
- Management Brief summarizing findings, lessons learned, and system improvements.
Our clients maintain a zero disallowed-cost record across dozens of SBIR/STTR audits.
Integrated Advisory for Commercialization and Growth
As your research transitions toward commercialization, we provide CFO-level insight:
- Forecast multi-year cash flow and indirect-rate evolution for future funding rounds.
- Align cost policy with new federal contracts or cooperative agreements.
- Support due-diligence documentation for investors and prime-contractor partnerships.
We ensure your financial infrastructure scales smoothly from R&D stage to production and sales.
From the first proposal budget to final audit closeout, Peter Witts CPA PC provides the financial and compliance expertise SBIR/STTR innovators need to thrive.
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.
