How to Record DCMA Corrective Action Costs
Recording labor and materials spent resolving a Level II or III Corrective Action Report (CAR) issued by DCMA.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Indirect Labor - System Compliance (Allowable) | Debit | 8,400.00 | - |
| Accrued Payroll | Credit | - | 8,400.00 |
💡 Accountant's Note
Costs to improve internal control systems or correct deficiencies noted by DCMA are generally allowable as ordinary and necessary business expenses unless they relate to fines.
Practitioner & Systems Framework
💻 ERP Architecture
Assign a secondary charge code for CAP (Corrective Action Plan) activities to track total cost of compliance.
⚠️ Audit Flags
Significant labor charges following the issuance of a DCMA CAR; review of system status (Approved/Disapproved).
📄 Required Documentation
DCMA CAR document, formal Corrective Action Plan, and timesheets showing dedicated labor.
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