GovCon Timekeeping DCAA Compliance: What You Need to Know

In the world of government contracting, accurate timekeeping isn’t just a good practice—it’s a critical component of DCAA compliance. For GovCon companies, timekeeping errors can lead to failed audits, payment delays, and even contract termination.

The Defense Contract Audit Agency (DCAA) places a strong emphasis on labor cost accuracy. Labor is often the largest expense on a government contract, and the DCAA requires that all time worked—billable or not—be tracked daily and verified by both the employee and a supervisor.

To meet GovCon timekeeping DCAA compliance standards, contractors should:

• Use an electronic or manual timekeeping system that logs time daily
• Require employee certification that hours are accurate and complete
• Prohibit supervisors from completing or altering employee timesheets
• Maintain detailed audit trails for any changes made to recorded time
• Establish written policies and procedures that govern time entry and approval

DCAA auditors will assess whether your timekeeping system supports accurate labor cost allocation. Noncompliance can result in disallowed costs or contract disqualification.

At N5 Specialized Accounting Services & Support, we help contractors implement DCAA-compliant timekeeping systems and train teams on best practices. Whether you’re preparing for a pre-award audit or strengthening internal controls, our experts ensure your labor tracking is accurate, efficient, and fully compliant.