Don’t Lose Your Potential Award from an Inadequate Accounting System

The federal government has strict requirements of an adequate accounting system. If you are a first-time awardee, or had your accounting system reviewed in the past, BEWARE. One thing is clear: federal agencies, especially DCAA and NSF are in a “show me” mode where they want evidence that your system is currently functioning. In other words, if you have accounting policies and procedures (regardless of the fact that you’re a small awardee), you need to say what you mean and mean what you say when it comes to your accounting system. The bottom line: you need to show that your accounting system functions.

To give you an example, we recently had two new awardees, one audited by DCAA and the other by NSF. DCAA reviewed the accounting system closely, although there were no transactions to show that the system will work as predicted based on the accounting policies and procedures. We had to show DCAA every screen capture, report, key stroke, etc. to show the system works. With NSF, external auditors have made it clear that they want to see a system already functioning, especially if there are current transactions.

So what does this all mean? Get your accounting system in order before deficiencies lead to delays in awards or outright recommendations to reject your award.  For more information on an adequate accounting system, visit us at

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One Response to Don’t Lose Your Potential Award from an Inadequate Accounting System

  1. I couldn’t resist commenting. Very well written!

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