The Department of Energy (DOE) has specific accounting and audit requirements for entities receiving contracts, grants, or cooperative agreements. As with all federal contract regulations, these requirements ensure proper financial management and compliance with federal regulations. If you have a contract, grant, or cooperative agreement with the DoE, you may be subject to a periodic DoE audit to ensure that your accounting systems meet DoE requirements.
DoE Audit Requirements
Compliance regulations for government contractors vary based on the agency and the contract in question. Generally, most government agencies follow the compliance requirements outlined in Title 2 Code of Federal Regulations (CFR) Part 200. The Department of Energy (DoE) is one agency with additional specific requirements.
DoE audits have two primary purposes:
- To determine whether the award recipient has internal control structures in place necessary to provide DoE with sufficient assurance that the awardee can manage the laws, regulations, terms, and conditions of the award
- To determine whether the award recipient has complied with all relevant laws, regulations, and award terms that may have a direct and material effect on the federal award
Frequently Asked Questions
When do these rules and regulations apply?
DoE audit requirements apply to any for-profit entity with a federal award granted by any U.S. Department of Energy component. Under Regulation 10 CFR 600.316, a for-profit entity that receives a federal award from the Department of Energy (DoE) must have a compliance audit for any fiscal year in which it expends $500,000 or more in financial assistance awards. The $500,000 threshold is interpreted to mean all federal DoE awards or contracts in aggregate during a fiscal year.
Audit requirements do not apply to awardees with less than $500,000 in annual expenditures.
How often do DoE audits need to be completed?
The contracting officer for the contract or award in question will determine the frequency with which DoE audits must be completed.
Who is responsible for ensuring that the audit is completed?
Completing the required DoE audit is wholly the responsibility of the awardee. The awardee must make the auditor’s report available to the relevant DoE contracting officers. While the audit is the awardee’s responsibility, audit costs are considered allowable costs for DoE awards.
Who can complete DoE audits?
DoE audits must be completed either by the Defense Contract Audit Agency (DCAA) or by an independent public accountant. However, awardees should bear in mind that only a contracting officer – not the awardee – can request a DCAA audit. Awardees should plan on meeting their audit requirements by scheduling an independent audit at their own expense.
In what situations might a contracting officer request a DCAA audit?
A contracting officer may request a DCAA audit in addition to the independent audit procured by the awardee. A contracting officer can only make this request under the following conditions:
- After first considering whether the independent audit satisfies audit requirements
- If the additional audit is limited to areas not adequately covered by the independent audit
- In coordination with the agency with predominant fiscal interest (if not DoE)
Where can I read more about the DoE’s audit requirements?
DoE accounting system requirements will generally comply with GAAP and the cost principles outlined in the Federal Acquisition Regulation (FAR part 31). The DoE’s compliance regulations and requirements are outlined in Title 10 of the Code of Federal Regulations, and further requirements are outlined in detail in 2 CFR Part 910.
How can I be prepared to pass audits?
Prepare for DoE audits and DCAA audits by maintaining accurate records and having a system in place for responding to audit requests. You’ll need an accounting system that can accomplish all the following:
- Keep all financial records up-to-date and accurate
- Follow DCAA-compliant timekeeping procedures
- Utilize job costing
- Track and segregate direct and indirect costs
- Generate thorough invoices
- Produce thorough documentation for all transactions related to government contracts
- Respond to audit requests in a timely and organized manner
Gov-Con can help make sure you’re prepared to pass DoE audits. As a QuickBooks Online Solutions Provider, Gov-Con offers an unbeatable accounting software solution package specifically designed for government contract bookkeeping to help you remain DCAA compliant. Plus, we offer four different levels of full or partial accounting services and support to meet your accounting and DCAA compliance needs. Working with GovCon, you can trust that your financials are in the hands of DCAA compliance experts. With our 20+ years of experience, rest easy knowing that your financials will be ready for audit at any time. Contact us today for a free consultation to determine which package is the best fit for you.