08. PF-16 Adequate Accounting System TM LH May 2019.pdf

Question Yes No NA Explanation 1 Is the accounting system in accord with the Generally Accepted Accounting

Principles (GAAP) applicable to the circumstances?

2 Does the timekeeping system identify employee labor by subcontract?

3 Does the labor distribution system charge direct and indirect labor cost to the subcontract?

4 Does the labor charging system provide for employees charging only labor categories they are qualified for?

5 Are Materials charged without profit/fee?

6 Does the accounting system align with these definitions?

1. “Direct materials” means those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product or service.

2. “Hourly rate” means the rate(s) prescribed in the contract for payment for labor that meets the labor category qualification of a labor category specified in the contract that are—

a. Performed by the contractor;

b. Performed by the subcontractors; or

c. Transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

3. “Materials” means—

a. Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the contractor under a common control;

b. Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;

c. Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.); and

d. Applicable indirect costs.

4. Material handling costs. When included as part of material costs, material handling costs shall include only costs clearly excluded from the labor-hour rate. Material handling costs may include all appropriate indirect costs allocated to direct materials in accordance with the contractor’s usual accounting procedures

Valid for one year from the date of signature PF-16 May 2019

Signature Date

Completed by Name Title

Preaward Survey of Prospective Subcontractor Accounting System for Time & Material or Labor Hour Subcontracts

Prospective Subcontractor

If No or NA, please explain

Table 1