DCAA Compliance

Overview

The Defense Contract Audit Agency (DCAA) sets strict timekeeping requirements that help ensure taxpayer money is used appropriately. If your business works on federal contracts, DCAA-compliant time tracking is mandatory.

Key Requirements

Daily Time Entry

Time must be entered daily - logging hours at the end of the week isn't allowed. Entries must be made each day to reflect work as it happens.

No Time Rounding

DCAA-compliant timekeeping does not permit the rounding of time. All hours and minutes must be recorded accurately, reflecting actual time worked, and cannot be rounded up or down.

Documentation Requirements

DCAA timesheet rules require comprehensive documentation for all time entries, including:

• Employee identification
• Date
• Project codes
• Detailed work descriptions

Audit Trail

Any corrections must be documented, including:

• The reason for the change
• Who made it
• When it occurred

Record Retention

All timesheets, payroll records, and related documents must be securely stored and easily accessible for a minimum of three years.

Employee Responsibility

Every employee must complete their own timesheet each day with an accurate record of their hours.

Security Standards

The time tracking system must meet federal IT security standards with:

• Secure access controls
• Government-grade data protection requirements

Consequences of Non-Compliance

Falling short of DCAA compliance standards can lead to:

• Rejected invoices
• Suspended payments
• Contract termination

Implementation

Government contractors must implement time tracking systems that support these requirements, including software that prevents retroactive changes without audit trails and enforces daily time entry policies.