Wednesday, September 5, 2012

Improving Compliance with Timekeeping Policies

Government contractors are required to maintain timekeeping systems that provide for the accurate and complete recording of direct labor hours as well as appropriate controls to ensure corrections to labor records are accurate and authorized. The DCAA Contract Audit Manual (Chapter 5, Section 9) lists a number of attributes that timekeeping systems must possess in order to meet those requirements. Among the attributes, whether you have a manual or automated timekeeping system, is a requirement that direct labor employees record their time no less often than daily. Elsewhere, the Manual states that employees should prepare their timecards as work is performed meaning that when they perform multiple tasks in a day, they record their hours multiple times in a day.

Most contractors can attest to the difficulty in getting their employees to regularly comply with these requirements. Contractors might have great timekeeping policies and procedures. They might regularly train employees and highlight the requirements during team meetings and periodic written communications. Many contractors perform their own compliance checks to see how well employees are following procedures. But in the end, it seems like every time the auditors show up to perform "floorchecks", some yahoo is sitting there with a timecard that hasn't been completed for the previous day or days. And then, you hope that the auditor doesn't find more instances of incomplete timecards so that you can argue that the failure was an isolated case rather than a systemic problem.

More and more companies are moving to automated timekeeping systems. With so many cost-effective, scalable, web-based offerings out there, even the smallest companies can afford to automate their timekeeping practices. Google "dcaa compliant timekeeping" and you'll find plenty to evaluate and choose from. There is a feature that is becoming increasingly popular among these web-based offerings that can help improve compliance rates. This feature scans the timekeeping databases during non-work hours and identifies employees that did not complete their timecards for that day. Then, the system automatically notifies the employee by email that it found an incomplete timecard. Most systems can be configured to also send the supervisor a copy of the same message. Then, the next time the employee checks his/her email, he/she is reminded to go on-line and complete the previous day's timecard.

This process is completely automated and has been shown to significantly improve compliance rates. If you are evaluating new timekeeping systems, don't commit to one that doesn't have this feature.

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