How to Record CAS Non-Compliance Interest
Records the accrual of interest penalties resulting from a CAS (Cost Accounting Standards) non-compliance determination by the ACO/DCAA.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Interest Expense - Unallowable | Debit | 4,500.00 | - |
| Accrued Liabilities - Gov Contracting | Credit | - | 4,500.00 |
💡 Accountant's Note
When a CAS non-compliance is determined to have caused increased costs to the government, the contractor is liable for the cost impact plus interest. Per FAR 31.205-20, interest on borrowings is unallowable, and interest on CAS non-compliance is similarly treated as an unallowable cost.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure interest is mapped to a '9xxx' or similar series account excluded from the overhead and G&A pools.
⚠️ Audit Flags
DCAA audit report of non-compliance, formal demand letter from the Administrative Contracting Officer (ACO).
📄 Required Documentation
CAS Disclosure Statement, DCAA Audit Report, and ACO Final Determination letter.
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Discussion & Community Questions
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