How to Record DCAA Reclassification
Adjusting accounting records to reflect DCAA audit findings regarding the misclassification of labor or expenses between pools.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Direct Labor - Engineering | Expense | 25,000.00 | - |
| Overhead Labor - Engineering Support | Expense | - | 25,000.00 |
💡 Accountant's Note
This entry reclassifies labor from an overhead pool to a direct project account following a DCAA audit determination that the work provided specific benefit to a single contract.
Practitioner & Systems Framework
💻 ERP Architecture
Process a labor distribution adjustment (LDA) in the payroll or timekeeping module to maintain the audit trail.
⚠️ Audit Flags
DCAA Labor Floor Checks or Incurred Cost Audit findings.
📄 Required Documentation
DCAA Audit Report (Form 1) and corrected employee timesheets.
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