How to Record DCAA Floor Check Adjustments
Adjusting labor distributions following a DCAA floor check audit finding where labor was incorrectly charged to a direct contract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Indirect Labor - Overhead Pool | Debit | 3,200.00 | - |
| Direct Labor - Contract WIP | Credit | - | 3,200.00 |
💡 Accountant's Note
Corrective entry to move labor costs from a direct contract to an overhead account after an auditor determines the employee was not performing direct project work.
Practitioner & Systems Framework
💻 ERP Architecture
Perform a labor reclassification (Labor Dist) in the ERP to maintain the link between the payroll register and the project ledger.
⚠️ Audit Flags
Differences between employee verbal descriptions and timecard entries during DCAA floor checks.
📄 Required Documentation
DCAA Floor Check Report; revised timecard or labor reclassification justification memorandum.
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Expert Analysis by Qusai Ahmad
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