When CAS applies (which can be a tricky question), the standards govern how a contractor measures costs, assigns them to cost accounting periods and allocates them to contracts. The standards aim to increase uniformity in cost accounting practices among government contractors. In addition, they establish consistency in cost accounting practices by individual government contractors over periods of time. In theory, this increased uniformity and consistency should improve understanding and communication between contractors and the government. It should also reduce contract disputes, improve contract administration effectiveness and facilitate equitable contract settlements. Baker Tilly can help your company turn this theory into reality.
The trade-off for increased uniformity and consistency (beneficial to the government) is decreased autonomy and flexibility (detrimental for contractors). CAS compliance can be burdensome and costly in today’s dynamic and competitive business environment.
We help government contractors interpret and apply CAS in ways that make sense to their unique businesses and circumstances. We understand not only the requirements, but also the core cost accounting principles and concepts upon which the Standards are based. We can help your company achieve CAS compliance that preserves your sanity and some reasonable accounting flexibility.
Contractors with one or more CAS-covered contracts must comply not only with some or all of the standards, but also with the Federal Acquisition Regulation (FAR) Part 30 and CAS Board regulations regarding CAS administration. These administrative rules can be more controversial, convoluted, and cumbersome than the Standards themselves.
Baker Tilly’s government contracting professionals help contractors effectively execute all aspects of CAS administration, including:
- Determining CAS applicability
- Preparing or revising Disclosure Statements
- Evaluating and processing cost accounting practice changes and non-compliances
- Administering CAS-covered subcontracts
Getting it right the first time offers the highest probability of avoiding controversial audit issues, maximizing cost recovery and minimizing administrative hassle. Consulting with an expert might mean the difference between smooth sailing and endless aggravation. If you’re facing important questions like those below, getting some expert advice will be a wise investment:
- Does CAS apply to my contract? Do I need to prepare and file a CASB Disclosure Statement (Form CASB DS-1)?
- How do I create a process to identify and track CAS-covered contracts and subcontracts?
- What’s the best way to draft an initial (or revise an existing) Disclosure Statement?
- How do I know if my Disclosure Statement is “adequate”?
- How do I determine if changes in my business will cause adoptions of initial accounting practices, organizational changes, or cost accounting practice changes?
- If I make changes, do they represent a single change or multiple cost accounting practice changes?
- Are the cost accounting changes I’m making required changes, or unilateral changes? How do I know if they’re desirable?
- How do I evaluate and defend against asserted CAS non-compliances?
- If I have a CAS noncompliance, how do I develop and evaluate potential alternative compliant practices to minimize cost impacts and interest?
- How and when do I prepare a notification of cost accounting practice changes?
- How and when do I prepare general dollar magnitude (GDM) or detailed cost impact (DCI) analyses?
- How do I identify “affected” CAS-covered contracts?
- What are some effective strategies and tactics to facilitate audit, negotiation, and resolution of cost accounting practice changes or noncompliances?
- Do I need to (or how do I) evaluate the adequacy of subcontractor disclosure statements?
- How do I minimize potential liability for subcontractor CAS noncompliances?