TRI Austin, a subsidiary of Texas Research Institute (TRI) International, was established in 1975 by Dr. J. Scott Thornton to perform high quality, rapid response research and development in advanced materials and materials testing. TRI Austin was founded to address reliability and materials needs of the US Navy, and advanced materials and technologies for the Department of Defense, NASA, and other Government and Commercial clients. TRI Austin has evolved into an organization that provides engineering services and advanced material development for global clientele while based in Austin, TX.
Behind the scenes, TRI Austin uses Acumatica project accounting heavily to achieve DCAA compliance. TRI Austin's government contracts are coded in Acumatica as projects and are typically firm fixed-price or cost-plus projects. TRI has worked had to ensure that their Acumatica instance is DCAA complaint, and they have accomplished this using a combination of native features, and a series of custom reports, and a few customizations.
Here are some of the key highlights of how TRI Austin uses Acumatica's project accounting for DCAA compliance:
Rate Tables: Rate tables are used to track provisional rates for things such as fringe, overhead, G&A, subcontractor and materials fees. Different rate tables are used for different projects depending upon their agreements with each government contract. At TRI, a provisional rate is used for most of the year, and then once actual rates are calculated, a true-up occurs to calculate the difference and allocate to the projects. Each rate has a start and end date and is easily updated when new rates are released. Since Acumatica allows rate tables to be assigned both at the project and task level, different rates can be easily assigned for different purposes to ensure accurate tracking of costs and invoicing.
Allocation Rules: Allocation rules are used to apply rates to labor and materials booked against a project/contract. TRI takes advantage of Acumatica's step-by-step allocation rules to apply fringe, overhead, and G&A rates to both labor and materials, as well as other other fees in a consistent and reliable manner. These calculations are complex as they stack on top of one another. In some instances, certain government projects have "Not To Exceed" (NTE) rates that must be observed and TRI's allocation rules are setup to do that. TRI runs their allocations twice a month after every payroll (which is bi-monthly) and just before billing. This gives TRI the visibility it needs to see fully burdened costs and track project costs against approved budgets.
Billing Rules: Billing rules complement allocation rules at TRI. They are used to take the billings calculated by the allocation rules and invoice them accordingly. For cost-plus projects, the labor, overhead, G&A, and other fees are itemized on the invoice, and then these numbers along with other supporting documentation (i.e. reports from Acumatica) are entered into WAWF (Wide-Area Work Flow) to invoice the government. For firm-fixed price projects, billings are based upon milestone completions and/or agreed upon payment schedules for contracted work which are independent of the cost calculations.
Custom Reports: Many different reports were created to support TRI's operations, including reports that calculate provisional vs. actual rates and direct cost reports. In addition, TRI assigns each project a subaccount code which allows any financial report in the system (e.g. Profit & Loss, Balance Sheet, etc.) to be run for an individual project.
Custom Dashboards: TRI has two main dashboards that they created in Acumatica. One focuses on labor utilization and gives an overview of the entire company as it relates to direct and indirect costs, as well as inter-company, bids and proposals, and independent research and development costs. TRI uses this dashboard to keep a close eye on these different types of costs with the intent of maximizing direct costs against projects since that keeps their overhead rates down and helps them stay competitive. TRI also has a dashboard for each project, which has been customized to show real-time data, including projections on fringe, overhead, G&A rates, and other fees for pending transactions (e.g. time card activity that has been entered but has not yet been approved and posted to the ledger). This provides excellent real-time visibility into projects and allows project managers to make more informed and better decisions as it relates to project budgets.
Auditing, Roles and Permissions: TRI uses Acumatica's native auditing capabilities and roles and permissions for DCAA compliance. They use a combination of record and field level auditing to know exactly who changed what and when, and roles and permissions are used to control who is allowed to make those changes, both on a record and individual field level. At any time, TRI can produce an audit trail necessary for DCAA audits, when combined with reports like the direct cost report.
Time Card Restrictions: An example of DCAA compliance means that employees cannot log future time against a government project. This is enforced with custom business rules that prevent employees from logging time in the future. Employees are still permitted to log future time for non-project work such as paid time off or sick leave, but direct costs posted to a government project are restricted to on or before the current date, only.
Managing Overtime: When employees work more than 40 hours, hourly rates have to be adjusted to an effective rate, which can change from one payroll cycle to another especially with bi-monthly payroll because the number of days within each payroll cycle changes from month to month. In addition, even though TRI pays overtime for non-exempt employees, government contracts do not permit billing overtime. To handle these situations, employees enter their time and TRI's payroll system automatically calculates the effective rate for each employee. Then when the payroll journal is recorded in the system after payroll is run, the correct effective rate is calculated and posted to the project, and overtime is separated out for government projects so it can be tracked from a cost perspective but it is not billed to the government.
As you can see, TRI uses Acumatica's project accounting module extensively to create a DCAA-complaint system that can stand on its own against any surprise DCAA audit.
Customer's Website: tri-austin.com