Friday, June 4, 2010

Streamlining the Billing Process - Part II

The blog posts from yesterday and today come courtesy of Jean Carr. Jean worked many years for the Defense Contract Audit Agency in the San Francisco Bay Area. Her responsibilities included reviews of public vouchers to ensure the accuracy, completeness, and propriety of billings (public vouchers) submitted to the Government through WAWF (Wide Area Work Flow). Many contractors, failing to exercise due care with their billings have had unforgettable encounters with Ms. Carr. Jean now consults with Bay Area contractors to help them improve their billing processes and internal controls. She can be reached through us at 866-849-4887, Extension 1. If you missed Part I, go back and read it first.

Now, for ten common mistakes made by contractors when submitting their vouchers:

  1. Using the wrong DCAA DoDACC code. Using the wrong DoDACC code will send the billing to the wrong DCAA office. When that happens, the DCAA office will simply reject the billing and leave it up to the contractor to figure out the correct DoDACC code. Prior to submitting your first voucher under each new contract, I suggest you call the DCAA office that you believe has cognizance of your company. Talk to the person who reviews your public vouchers for adequacy and verify that he/she HAS the contract. (10 percent of the time, DCAA doesn’t have a copy of the contract. 15 percent of the thime the PCO made one of two errors: he/she put the wrong billing DCAA code into the contract or left out the billing requirements (such as, the correct FAR references). Since the DCAA processor is not as committed to getting you paid as you are in getting paid, I suggest that you be proactive with the PCO, ACO and DCAA and do whatever it takes (modifications, explanations in the PV, etc.) to ensure the correct DoDACC codes.
  2.  Submitting vouchers out of numerical sequence.
  3. Billing indirect costs based on provisional billing rates that have not had prior DCAA approval (THIS IS A BIG ONE).
  4. Using expired billing rates (i.e. applying last year's rates to this year's costs).
  5. Failing to submit a request, along with supporting documentation, for new interim billing rates or for temporary adjustment rates (final billing rates are used after DCAA completes its audit of your incurred cost submission and there has been a formal rate agreement. 
  6. Mathematical errors. For example
    • Last cum plus new charges do not equal new cum
    • Backing into the total funded amount rather than showing the actual incurred cost and subtracting the amount in excess of the funding limit.
    • Rate times Base does not equal the amount shown on the public voucher.
  7. Billing costs in excess of the funded amount of the contract.
  8. Billing fee in excess of contractual limitations(some contracts cap fee at 85% until final billing).
  9. If the contract is costed and funded by CLIN/SLIN (Contract Line Item Numbers/Sub Line Item Numbers), the contractor must bill by the CLIN/SLIN. A PCO once complained to me: “I went to all the trouble to set this contract up by line item and funded it by line item and then you let the contractor bill however they wanted to?” Oh, and watch that you don’t go over the period of performance on each individual CLIN?SLIN. 
  10. Submitting incomplete, incorrect, or inadequate detail to support the public voucher.

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