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Wednesday28 June 2017

Success Stories

DEFENSE CONTRACTOR, SAN JOSE, CA

Goal of the Engagement: 

The engagement with this client was a result of the Defense Contract Audit Agency (DCAA)’s response to a Government Accounting Office (GAO) audit that asserted DCAA was not being effective in carrying out specific accounting system audits of Federal Contractors.  The goal of the engagement was to respond to a specific citation of inadequacy of the clients accounting system as written by the local DCAA branch office.

Deficiencies we needed to address:

  1. Client’s cost accounting system was not adequately documented with written descriptions of its cost allocation pools and allocation bases.
  2. Client’s employees and supervisors did not prepare manual bi-monthly timesheets in accordance with the company’s own policies.
  3. Client did not calculate accurate indirect expense rates using a proper and consistent indirect rate structure.
  4. Client maintained inadequate written policies and procedures related to the identification, segregation and removal of FAR unallowable costs.
  5. Client did not have effective written policies and procedures (controls) which would ensure proper monitoring of costs and funds under contracts (in particular cost plus fixed fee and time and material contracts).

Solutions provided:

In order to resolve the client’s deficiencies we created a solution that consisted of –

  1. A set of written policies and procedures tailored to the operations of client.
  2. Indirect rate computation models for estimated costs and final actual costs.
  3. Specific identification of the types of FAR unallowable costs incurred by the client.
  4. A test of all computations to ensure that the clients accounting system was working in accordance with written policies and procedures.

In addition, we drafted model letters for the client to present to procuring contracting officers so that they could (i) request that DCAA return to the client’s location earlier than DCAA’s requested 90 to 120 day preferred re-engagement timeframes.

Accomplishments

We were successful in having DCAA not only return for follow-up audit 60 days prior to DCAA’s requested re-entry date but we were also successful in having DCAA deem the client’s accounting, timekeeping, and billing systems adequate for federal government contracting purposes.


 

 

SOFTWARE COMPANY, PALO ALTO, CA

Goals of the Engagement: 

The engagement with this client was a result of the Defense Contract Audit Agency (DCAA)’s response to a Government Accounting Office (GAO) audit that asserted DCAA was not being effective in carrying out specific accounting system audits of Federal Contractors.  The goal of the engagement was to respond to a specific citation of inadequacy of the clients accounting system as written by the local DCAA branch office.

Deficiencies we needed to address:

  1. Client’s cost accounting system did not provide for a logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives (i.e. contracts).
  1. Client’s accounting practices were not supported by a written definition of what costs and expenses were considered unallowable under the provisions of FAR part 31.
  2. Client maintained no written descriptions for its timekeeping policies and procedures.
  3. The Client did not post accounting transactions into its books of account (i.e. general ledger) on an interim basis.

Solutions provided:

In order to resolve the client’s issues we created a solution model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. An indirect rate computation model using a single indirect rate allocation methodology.
  3. Specific identification of the types of FAR unallowable costs incurred by the client.
  4. Test of computations to ensure that the clients accounting system was working in accordance with written policies and procedures.

Additionally, we drafted a response letter to DCAA addressing all of the accounting system deficiencies as reported in their Statement of Conditions.

Accomplishments:

We were successful in having DCAA deem the client’s accounting system provisionally adequate. The client was able to continue billing and apply for grants and bid on federal contracts.

 

 


 

SOFTWARE COMPANY, SAN MATEO, CA

Goals of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit. The client had been through two previous audits after working with other consultants and had failed the accounting system audit both times.

Deficiencies we needed to address:

  1. Client’s written policies and procedures related to travel expense claims were inadequate primarily because the clients practices and its written travel policies and procedures did not follow the provisions of the Joint Travel Regulations.
  2. Client maintained no written policies and procedures for its work at home (WAH) practices.
  3. Client’s employee’s did not always sign their timesheets.
  4. Client’s accounting practices were not supported by a written definition of what costs and expenses were considered unallowable under the provisions of FAR part 31.
  5. Client did not have effective written policies and procedures (controls) which would ensure proper monitoring of costs and funds under contracts (in particular cost plus fixed fee and time and material contracts).

Solutions Provided: 

In order to resolve the client’s issues we created a model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the clients final indirect rate computations for calendar years 2006 through 2010.
  3. We assisted the client to specifically identify the types of FAR unallowable costs incurred (in particular unallowable travel expenses).
  4. We drafted a work at home (WAH) set of policies and procedures.

Additionally, we drafted letters for the client to present to procuring contracting officers so that they could request that DCAA return to the client’s location earlier than DCAA’s requested 90 to 120 day preferred re-engagement timeframes.

Accomplishments

We were successful in having DCAA deem the client’s accounting system fully acceptable.

 


 

DEPARTMENT OF DEFENCE CONTRACTOR, LIVERMORE, CA

Goal of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit.

Deficiencies we needed to address:

  1. Client’s inadequate follow-up action to compute and monitor indirect expense rates.
  2. Inadequate documentation of consultant labor.
  3. Inadequate documentation of consultant travel expenses.
  4. Inadequate documentation of direct material cost allocation.

Solutions Provided: 

To resolve the clients issues we created a the following –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the client’s final indirect rate computations for calendar years 2006 through 2010.
  3. We assisted the client in identifying the components and purpose of a bill of materials.
  4. We assisted client to identifying the requirements for support of consulting labor and other costs (i.e. travel expenses).
  5. We drafted a work at home (WAH) set of policies and procedures.

Accomplishments

All documentation was submitted to DCAA; at the time of writing this, they have not issued a follow up audit report.

 


 

DEFENSE CONTRACTOR, OAKLAND, CA

Purpose of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit.

Deficiencies we needed to address:

  1. Client’s inadequate follow-up action to compute and monitor indirect expense rates.
  2. Inadequate Written Timekeeping Policies and Procedures.
  3. Inadequate description of cost allocation bases.

Solutions Provided: 

To provide solution for the client we created a model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the clients final indirect rate computations for calendar year 2010.

 

DCAA Second Visit Results:  DCAA concurred with the solutions we provided; however, they cited several additional areas of deficiency during their second follow-up audit, stated as follows:

  1. Inappropriate description of the Fringe Allocation Base.
  2. Timekeeping error.
  3. Inadequate labor distribution.

Accomplishments

Kiwi Consulting discussed alternative solutions to the deficiencies cited by DCAA in its SOCARS related to the above three topic areas. As of the time of writing this summary DCAA has not issued its follow up audit report.

 


 

TECHNOLOGY COMPANY, SAN FRANCISCO, CA

Purpose of the Engagement: 

Our engagement with this client resulted from a determination of accounting system inadequacy as a result of DCAA’s review of interim vouchers.  The client had been under the guidance of the Peninsula Branch Office (Mountain View, CA) during its first several years of operation but changed the location of its financial operations to Fremont, CA. With this change the East Bay Branch Office made a determination that the client lacked support for labor and materials cost incurred during a period of time prior to the month in which interim billings were being made.

The East Bay Branch Office suspended billings related to the client’s contracts for almost 8 months.  Kiwi Consulting was engaged to determine an alternative method for allocating “early period” or “prior period” costs incurred to future months.

Solution Provided: 

In order to resolve the client’s cost accounting issues we suggested creation of intermediate cost pools so that labor hours could be captured to the job worked during the time period in which the hours were incurred (by contract) then these specifically identified labor hours and costs could be billed to differing contracts at a later point in time.

Accomplishments

Kiwi Consulting was successful in getting the clients billing process restarted so the client was able to bill once again.

 


 

CONSTRUCTION DEFENSE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting to review the company’s cost allocation practices, existing contracts, and accounting system as if a DCAA accounting system audit were to be performed. Our team undertook a “mock audit” using DCAA methodology.

Results

We determined that the client had very good existing controls for commercial and firm fixed price federal activity; however, we made several suggestions for improvement related to federal cost plus fixed fee and time and material contracting requirements. The client was receptive to our recommendations and once implemented, will be ready to undergo a DCAA accounting system audit.

 


 

TECHNOLOGY COMPANY, SAN MATEO, CA

Purpose of the Engagement: 

This client operates under the cost requirements of the “non-department of defense regulations” of the Federal Acquisition Regulations. The firm participates in small business innovative research (SBIR) contracting, cost share grants, etc. with the Department of Energy and other agencies. 

Accomplishments

We assisted the client in providing a detailed indirect rate estimate to DCAA which was agreed to by the DCAA Mountain View Branch Office.  We also provided assistance to the client in negotiations for indirect rates with several contracting officers in the non-department of defense contracting world.

 


 

MANUFACTURING COMPANY, BOSTON, MA

Purpose of the Engagement: 

This client was under consideration for a new small business innovative research (SBIR) contract and had been notified by DCAA that many of its disclosed practices would not comply with Federal Contract Cost Requirements. Kiwi Consulting was engaged to perform a “mock-audit” of the clients written policies and procedures for accounting and its cost allocation processes in anticipation of the DCAA accounting system audit.

Work Performed for the Client

We drafted written accounting, timekeeping, and billing policies and procedures unique to federal requirements, to supplement the clients existing written policies and procedures. We also provided several cost allocation models for the client to present to the DCAA auditor.

Accomplishments

We performed a mock audit and met with the client’s staff to answer questions that may be asked by DCAA.  We are awaiting notification of DCAA’s follow up audit.

 

 


 

MANUFACTURING COMPANY, OAKLAND, CA

Purpose of the Engagement: 

The client sought our services to review its accounting practices relative to two Department of Energy (DOE) Cost Share Grants.  One grant was a prime grant and the other was a sub Grant.

Results of our review

During the early stages of this engagement we concluded that the client was not segregating direct costs from indirect costs in a consistent manner and as such would not pass a DCAA audit with the current systems and procedures. We suggested several approaches to the client in computing indirect rates and ensuring that direct costs be treated separately from indirect expenses.

Accomplishments

The client adopted all of our suggestions for classifying direct costs vs. indirect expenses and ensuring the billed costs followed the same pattern as recorded (actual) costs.  The client was then able to successfully bill for significant costs which had not been reimbursed for almost one year.

 

 


 

CONSTRUCTION COMPANY, NORTHERN CA

Purpose of the Engagement: 

The established construction company engaged Kiwi Consulting to review its accounting practices relative to commercial construction. Our goal was to provide some rational for the methods under which the competition may have been understating bid costs. We also provided a report on upgrades that would be necessary to systems and policies and procedures if the client were to ever bid federal contracts.

Initial Findings

We met with the client and provided various cost allocation models (direct costing, indirect expense rate recovery, and intermediate allocation processes).  This discussion was well received by the client.

Accomplishments

The client gained a good understanding of cost allocation processes as provided under the FAR and used the information we provided to compile more competitive bids on projects. The client did decide not to implement all of our recommendations to become a fully compliance federal contractor at this time.

 

 


 

DEFENSE CONTRACTOR, LOS ANGELES, CA

Purpose of the Engagement: 

This client engaged our services to review its past cost accounting practices, written accounting policies and procedures, and written timekeeping policies and procedures.

Review Findings

Upon completing our Risk Assessment review with the client we learned that they would soon be required to undergo an initial accounting system review by DCAA and a pricing proposal review by a large defense contractor.  Given the purpose of the engagement and the possibility of the prime contractor’s review of a proposal from our client we determined that a complete new set of written accounting system, timekeeping system, and supplemental written proposal policies and procedures were required.

Accomplishments

We successfully completed a set of written policies and procedures for (i) accounting, (ii) timekeeping, and (iii) proposals.  We completed a complete “bottoms-up” indirect rate forecasting model for the client as well as assisting in the design of the client’s general ledger and job cost accounting system.

With our assistance the client was able to successfully negotiate a multimillion dollar price proposal with the prime contractor. 

 


 

MEDICAL INDUSTRY DEFENCE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

The client engaged our services in anticipation of an accounting system audit to be performed by DCAA.  We completed an initial Risk Assessment which concluded that the client required installation of a job cost accounting system, and written policies and procedures for (i) accounting, (ii) timekeeping, and (iii) billing.

Accomplishments

We provided a set of written policies and procedures for accounting, timekeeping, and billing systems. We also assisted in setting up a compliant job cost system.

 


 

TECHNOLOGY COMPANY, MOUNTAIN VIEW, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting provide proactive advice to guard against potential future issues with DCAA audits.

Initial Findings

Our initial risk assessment concluded that the client needed -

  1. Forecasted indirect rates.
  2. Review 3-years completed incurred cost proposals (i.e. ICE submissions).

Accomplishments

We completed our review of the ICE submissions and provided advice on the client’s price proposals. 

 


 

CONSULTING COMPANY, SAN FRANCISCO, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting as the result of actions by DCAA East Bay Branch to declare their billing practices inadequate. We were also engaged to provide accounting advice in the area of Federal Contract Requirements.

Accomplishments

We completed a written draft of recommendations related to a set of new fringe benefits to be offered by the client to its employees and we provided guidance with respect to assertions made by DCAA related to the clients accounting, timekeeping, and billing practices.

 


 

DEFENSE CONTRACTOR, SAN JOSE, CA

Purpose of the Engagement: 

The client engaged Kiwi Consulting to review their existing written policies and procedures for accounting, billing, and timekeeping. The client also requested that we review the completed Incurred Cost Proposals (i.e. ICE Claims) for the years 2006 through 2010.

Accomplishments:  

We completed written policies and procedures for (i) accounting, (ii) billing, (iii) timekeeping, and (iv) a working at home (WAH). We also completed a review of the prior year ICE schedules and provided recommendations for changes thereto.

 

 


 

RESEARCH COMPANY, OAKLAND, CA

Purpose of the Engagement: 

This client operates under the cost requirements of the “non-department of defense” section of the FAR.  The client participates in small business grants with the Department of Energy and other such agencies.  They engaged our services to review their accounting practices for compliance.

Accomplishments:  

We developed a detailed indirect rate estimate for the client and provided assistance in negotiations for indirect rates with several contracting officers.

 

 


 

CPA FIRM WITH FEDERAL CONTRACT CLIENTS, LOS ANGELES, CA

Purpose of the Engagement: 

This client CPA firm learned of our services as the result of web presentation provided by Kiwi Consulting.  The client has several clients that performed contracts for the Federal Government.  We were engaged to make recommendations for possible new accounting software to assist the client to provide better job costing and indirect rate methods for its clients.

Accomplishments

We were successful in providing assistance to the client but the client decided to maintain its existing software package for the time being. We will be re-engaged when they do make the change.

 


 

DEFENSE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

We were engaged to assist the client to prepare wide area workflow (WAWF) billings on its sole Federal Government contract. In completing the WAWF task for the client, they also requested that we assist in helping them obtain ownership of some items of equipment purchased during performance of the federal contract.

Accomplishments

We were successful in helping the client recover about significant billings which were set to lapse and remain with the Government. We also provided guidance to the client so that he could contact the proper contracting officer within the government to gain ownership in the equipment items under the contract.

 

 


 

DEPARTMENT OF TRANSPORT CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

Kiwi Consulting’s goal with this client was to gain an understanding of the company’s cost allocation process for a home office and an operating segment located overseas.

Accomplishments

We reviewed the client’s general ledger for calendar years 2010 and 2011 for –

  1. Segregation of direct costs (direct labor, direct supplies and the like) from indirect expenses.
  2. Accumulation of indirect expenses by general ledger account title (e.g. indirect labor expense, building rent, employee fringe benefits etc.).
  3. Segregation and removal of Federal Acquisition Regulation (FAR) unallowable expenses from other direct and indirect costs. 

These segregations were completed for both the Home Office and the overseas “off-site” office.  With input from the client the client’s we were able to identify a method to charge certain home office management expenses to the operating segment overseas.

We completed a cost allocation process with written narrative so that a Certified Public Accountant (CPA) could initiate an engagement that would allow an opinion to be made as to the suitability the clients cost allocation process for both Federal and State Government Contracting purposes. (A133 type audit).


 


 

 

SOFTWARE COMPANY, PALO ALTO, CA

Goals of the Engagement: 

The engagement with this client was a result of the Defense Contract Audit Agency (DCAA)’s response to a Government Accounting Office (GAO) audit that asserted DCAA was not being effective in carrying out specific accounting system audits of Federal Contractors.  The goal of the engagement was to respond to a specific citation of inadequacy of the clients accounting system as written by the local DCAA branch office.

Deficiencies we needed to address:

  1. Client’s cost accounting system did not provide for a logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives (i.e. contracts).
  1. Client’s accounting practices were not supported by a written definition of what costs and expenses were considered unallowable under the provisions of FAR part 31.
  2. Client maintained no written descriptions for its timekeeping policies and procedures.
  3. The Client did not post accounting transactions into its books of account (i.e. general ledger) on an interim basis.

Solutions provided:

In order to resolve the client’s issues we created a solution model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. An indirect rate computation model using a single indirect rate allocation methodology.
  3. Specific identification of the types of FAR unallowable costs incurred by the client.
  4. Test of computations to ensure that the clients accounting system was working in accordance with written policies and procedures.

Additionally, we drafted a response letter to DCAA addressing all of the accounting system deficiencies as reported in their Statement of Conditions.

Accomplishments:

We were successful in having DCAA deem the client’s accounting system provisionally adequate. The client was able to continue billing and apply for grants and bid on federal contracts.

 

 


 

SOFTWARE COMPANY, SAN MATEO, CA

Goals of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit. The client had been through two previous audits after working with other consultants and had failed the accounting system audit both times.

Deficiencies we needed to address:

  1. Client’s written policies and procedures related to travel expense claims were inadequate primarily because the clients practices and its written travel policies and procedures did not follow the provisions of the Joint Travel Regulations.
  2. Client maintained no written policies and procedures for its work at home (WAH) practices.
  3. Client’s employee’s did not always sign their timesheets.
  4. Client’s accounting practices were not supported by a written definition of what costs and expenses were considered unallowable under the provisions of FAR part 31.
  5. Client did not have effective written policies and procedures (controls) which would ensure proper monitoring of costs and funds under contracts (in particular cost plus fixed fee and time and material contracts).

Solutions Provided: 

In order to resolve the client’s issues we created a model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the clients final indirect rate computations for calendar years 2006 through 2010.
  3. We assisted the client to specifically identify the types of FAR unallowable costs incurred (in particular unallowable travel expenses).
  4. We drafted a work at home (WAH) set of policies and procedures.

Additionally, we drafted letters for the client to present to procuring contracting officers so that they could request that DCAA return to the client’s location earlier than DCAA’s requested 90 to 120 day preferred re-engagement timeframes.

Accomplishments

We were successful in having DCAA deem the client’s accounting system fully acceptable.

 


 

DEPARTMENT OF DEFENCE CONTRACTOR, LIVERMORE, CA

Goal of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit.

Deficiencies we needed to address:

  1. Client’s inadequate follow-up action to compute and monitor indirect expense rates.
  2. Inadequate documentation of consultant labor.
  3. Inadequate documentation of consultant travel expenses.
  4. Inadequate documentation of direct material cost allocation.

Solutions Provided: 

To resolve the clients issues we created a the following –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the client’s final indirect rate computations for calendar years 2006 through 2010.
  3. We assisted the client in identifying the components and purpose of a bill of materials.
  4. We assisted client to identifying the requirements for support of consulting labor and other costs (i.e. travel expenses).
  5. We drafted a work at home (WAH) set of policies and procedures.

Accomplishments

All documentation was submitted to DCAA; at the time of writing this, they have not issued a follow up audit report.

 


 

DEFENSE CONTRACTOR, OAKLAND, CA

Purpose of the Engagement: 

Our engagement with this client resulted from a second DCAA Accounting System Audit wherein, DCAA found that the client had not addressed many of the deficiencies cited in DCAA’s initial audit.

Deficiencies we needed to address:

  1. Client’s inadequate follow-up action to compute and monitor indirect expense rates.
  2. Inadequate Written Timekeeping Policies and Procedures.
  3. Inadequate description of cost allocation bases.

Solutions Provided: 

To provide solution for the client we created a model that consisted of –

  1. A set of written policies and procedures tailored to the operations of the client.
  2. We reviewed and recomputed the clients final indirect rate computations for calendar year 2010.

 

DCAA Second Visit Results:  DCAA concurred with the solutions we provided; however, they cited several additional areas of deficiency during their second follow-up audit, stated as follows:

  1. Inappropriate description of the Fringe Allocation Base.
  2. Timekeeping error.
  3. Inadequate labor distribution.

Accomplishments

Kiwi Consulting discussed alternative solutions to the deficiencies cited by DCAA in its SOCARS related to the above three topic areas. As of the time of writing this summary DCAA has not issued its follow up audit report.

 


 

TECHNOLOGY COMPANY, SAN FRANCISCO, CA

Purpose of the Engagement: 

Our engagement with this client resulted from a determination of accounting system inadequacy as a result of DCAA’s review of interim vouchers.  The client had been under the guidance of the Peninsula Branch Office (Mountain View, CA) during its first several years of operation but changed the location of its financial operations to Fremont, CA. With this change the East Bay Branch Office made a determination that the client lacked support for labor and materials cost incurred during a period of time prior to the month in which interim billings were being made.

The East Bay Branch Office suspended billings related to the client’s contracts for almost 8 months.  Kiwi Consulting was engaged to determine an alternative method for allocating “early period” or “prior period” costs incurred to future months.

Solution Provided: 

In order to resolve the client’s cost accounting issues we suggested creation of intermediate cost pools so that labor hours could be captured to the job worked during the time period in which the hours were incurred (by contract) then these specifically identified labor hours and costs could be billed to differing contracts at a later point in time.

Accomplishments

Kiwi Consulting was successful in getting the clients billing process restarted so the client was able to bill once again.

 


 

CONSTRUCTION DEFENSE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting to review the company’s cost allocation practices, existing contracts, and accounting system as if a DCAA accounting system audit were to be performed. Our team undertook a “mock audit” using DCAA methodology.

Results

We determined that the client had very good existing controls for commercial and firm fixed price federal activity; however, we made several suggestions for improvement related to federal cost plus fixed fee and time and material contracting requirements. The client was receptive to our recommendations and once implemented, will be ready to undergo a DCAA accounting system audit.

 


 

TECHNOLOGY COMPANY, SAN MATEO, CA

Purpose of the Engagement: 

This client operates under the cost requirements of the “non-department of defense regulations” of the Federal Acquisition Regulations. The firm participates in small business innovative research (SBIR) contracting, cost share grants, etc. with the Department of Energy and other agencies. 

Accomplishments

We assisted the client in providing a detailed indirect rate estimate to DCAA which was agreed to by the DCAA Mountain View Branch Office.  We also provided assistance to the client in negotiations for indirect rates with several contracting officers in the non-department of defense contracting world.

 


 

MANUFACTURING COMPANY, BOSTON, MA

Purpose of the Engagement: 

This client was under consideration for a new small business innovative research (SBIR) contract and had been notified by DCAA that many of its disclosed practices would not comply with Federal Contract Cost Requirements. Kiwi Consulting was engaged to perform a “mock-audit” of the clients written policies and procedures for accounting and its cost allocation processes in anticipation of the DCAA accounting system audit.

Work Performed for the Client

We drafted written accounting, timekeeping, and billing policies and procedures unique to federal requirements, to supplement the clients existing written policies and procedures. We also provided several cost allocation models for the client to present to the DCAA auditor.

Accomplishments

We performed a mock audit and met with the client’s staff to answer questions that may be asked by DCAA.  We are awaiting notification of DCAA’s follow up audit.

 

 


 

MANUFACTURING COMPANY, OAKLAND, CA

Purpose of the Engagement: 

The client sought our services to review its accounting practices relative to two Department of Energy (DOE) Cost Share Grants.  One grant was a prime grant and the other was a sub Grant.

Results of our review

During the early stages of this engagement we concluded that the client was not segregating direct costs from indirect costs in a consistent manner and as such would not pass a DCAA audit with the current systems and procedures. We suggested several approaches to the client in computing indirect rates and ensuring that direct costs be treated separately from indirect expenses.

Accomplishments

The client adopted all of our suggestions for classifying direct costs vs. indirect expenses and ensuring the billed costs followed the same pattern as recorded (actual) costs.  The client was then able to successfully bill for significant costs which had not been reimbursed for almost one year.

 

 


 

CONSTRUCTION COMPANY, NORTHERN CA

Purpose of the Engagement: 

The established construction company engaged Kiwi Consulting to review its accounting practices relative to commercial construction. Our goal was to provide some rational for the methods under which the competition may have been understating bid costs. We also provided a report on upgrades that would be necessary to systems and policies and procedures if the client were to ever bid federal contracts.

Initial Findings

We met with the client and provided various cost allocation models (direct costing, indirect expense rate recovery, and intermediate allocation processes).  This discussion was well received by the client.

Accomplishments

The client gained a good understanding of cost allocation processes as provided under the FAR and used the information we provided to compile more competitive bids on projects. The client did decide not to implement all of our recommendations to become a fully compliance federal contractor at this time.

 

 


 

DEFENSE CONTRACTOR, LOS ANGELES, CA

Purpose of the Engagement: 

This client engaged our services to review its past cost accounting practices, written accounting policies and procedures, and written timekeeping policies and procedures.

Review Findings

Upon completing our Risk Assessment review with the client we learned that they would soon be required to undergo an initial accounting system review by DCAA and a pricing proposal review by a large defense contractor.  Given the purpose of the engagement and the possibility of the prime contractor’s review of a proposal from our client we determined that a complete new set of written accounting system, timekeeping system, and supplemental written proposal policies and procedures were required.

Accomplishments

We successfully completed a set of written policies and procedures for (i) accounting, (ii) timekeeping, and (iii) proposals.  We completed a complete “bottoms-up” indirect rate forecasting model for the client as well as assisting in the design of the client’s general ledger and job cost accounting system.

With our assistance the client was able to successfully negotiate a multimillion dollar price proposal with the prime contractor. 

 


 

MEDICAL INDUSTRY DEFENCE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

The client engaged our services in anticipation of an accounting system audit to be performed by DCAA.  We completed an initial Risk Assessment which concluded that the client required installation of a job cost accounting system, and written policies and procedures for (i) accounting, (ii) timekeeping, and (iii) billing.

Accomplishments

We provided a set of written policies and procedures for accounting, timekeeping, and billing systems. We also assisted in setting up a compliant job cost system.

 


 

TECHNOLOGY COMPANY, MOUNTAIN VIEW, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting provide proactive advice to guard against potential future issues with DCAA audits.

Initial Findings

Our initial risk assessment concluded that the client needed -

  1. Forecasted indirect rates.
  2. Review 3-years completed incurred cost proposals (i.e. ICE submissions).

Accomplishments

We completed our review of the ICE submissions and provided advice on the client’s price proposals. 

 


 

CONSULTING COMPANY, SAN FRANCISCO, CA

Purpose of the Engagement: 

This client engaged Kiwi Consulting as the result of actions by DCAA East Bay Branch to declare their billing practices inadequate. We were also engaged to provide accounting advice in the area of Federal Contract Requirements.

Accomplishments

We completed a written draft of recommendations related to a set of new fringe benefits to be offered by the client to its employees and we provided guidance with respect to assertions made by DCAA related to the clients accounting, timekeeping, and billing practices.

 


 

DEFENSE CONTRACTOR, SAN JOSE, CA

Purpose of the Engagement: 

The client engaged Kiwi Consulting to review their existing written policies and procedures for accounting, billing, and timekeeping. The client also requested that we review the completed Incurred Cost Proposals (i.e. ICE Claims) for the years 2006 through 2010.

Accomplishments:  

We completed written policies and procedures for (i) accounting, (ii) billing, (iii) timekeeping, and (iv) a working at home (WAH). We also completed a review of the prior year ICE schedules and provided recommendations for changes thereto.

 

 


 

RESEARCH COMPANY, OAKLAND, CA

Purpose of the Engagement: 

This client operates under the cost requirements of the “non-department of defense” section of the FAR.  The client participates in small business grants with the Department of Energy and other such agencies.  They engaged our services to review their accounting practices for compliance.

Accomplishments:  

We developed a detailed indirect rate estimate for the client and provided assistance in negotiations for indirect rates with several contracting officers.

 

 


 

CPA FIRM WITH FEDERAL CONTRACT CLIENTS, LOS ANGELES, CA

Purpose of the Engagement: 

This client CPA firm learned of our services as the result of web presentation provided by Kiwi Consulting.  The client has several clients that performed contracts for the Federal Government.  We were engaged to make recommendations for possible new accounting software to assist the client to provide better job costing and indirect rate methods for its clients.

Accomplishments

We were successful in providing assistance to the client but the client decided to maintain its existing software package for the time being. We will be re-engaged when they do make the change.

 


 

DEFENSE CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

We were engaged to assist the client to prepare wide area workflow (WAWF) billings on its sole Federal Government contract. In completing the WAWF task for the client, they also requested that we assist in helping them obtain ownership of some items of equipment purchased during performance of the federal contract.

Accomplishments

We were successful in helping the client recover about significant billings which were set to lapse and remain with the Government. We also provided guidance to the client so that he could contact the proper contracting officer within the government to gain ownership in the equipment items under the contract.

 

 


 

DEPARTMENT OF TRANSPORT CONTRACTOR, SAN FRANCISCO, CA

Purpose of the Engagement: 

Kiwi Consulting’s goal with this client was to gain an understanding of the company’s cost allocation process for a home office and an operating segment located overseas.

Accomplishments

We reviewed the client’s general ledger for calendar years 2010 and 2011 for –

  1. Segregation of direct costs (direct labor, direct supplies and the like) from indirect expenses.
  2. Accumulation of indirect expenses by general ledger account title (e.g. indirect labor expense, building rent, employee fringe benefits etc.).
  3. Segregation and removal of Federal Acquisition Regulation (FAR) unallowable expenses from other direct and indirect costs. 

These segregations were completed for both the Home Office and the overseas “off-site” office.  With input from the client the client’s we were able to identify a method to charge certain home office management expenses to the operating segment overseas.

We completed a cost allocation process with written narrative so that a Certified Public Accountant (CPA) could initiate an engagement that would allow an opinion to be made as to the suitability the clients cost allocation process for both Federal and State Government Contracting purposes. (A133 type audit).