What is an adequate accounting system?
While this depends on the agency and auditor, an adequate accounting system is typically a system that has centralized data, contemporaneous transactional processing, adequate segregation of duties, ability to track costs by direct, indirect (by cost pool and base) and unallowable costs, and track direct costs by federal award or commercial activity (job costing). While there are awardees who maintain their accounting system on a decentralized basis such as an accounting system supported by numerous external documents (such as Excel®), and some agencies or auditors may determine this to be adequate, such a system increases the likelihood of errors in accounting and the risk of under/overcharging the government. For a centralized accounting system, click on [Quickstart] to assist you.
