How to Write a DCAA Timekeeping Policy & Training Guide

The Essential Components of a Compliant Timekeeping Policy

However you choose to write your policy, it must be clear and enforceable. For it to be compliant, it also has to be aligned with the rules set out by the DCAA and FAR regulations.

At a minimum, it should contain the following sections:

1. Purpose and scope: Explain why the policy exists and who it applies to.
2. Responsibilities: Outline timekeeping responsibilities for employees, supervisors, and administrative staff.
   
   1. Include what is expected from each role and what they must do.
   2. Outline what is not permitted (ex., tampering with timesheet data).
3. Timekeeping requirements: Make sure this section covers:
   
   1. How daily, contemporaneous entry works
   2. How all hours worked must be recorded
   3. How hours must be linked to projects and charge codes for direct and indirect labor
   4. What information goes on a timesheet
4. Timesheet submission and approval: Detail the process for submitting timesheets and how they are reviewed for correctness.
5. Corrections and changes: Outline the process that must be followed if a timesheet adjustment or correction is required.
6. Training and communication: Cover how and when employees will be trained on timekeeping practices.
7. Monitoring and internal reviews: Explain that the organization may carry out internal checks for compliance.
8. Disciplinary action for non-compliance: Detail what a policy violation looks like and what disciplinary action will be taken if that occurs.
9. Policy ownership: Write who is responsible for the policy, and confirm that it will be periodically reviewed and updated.

If you’re stuck on what to write for a full-timekeeping policy, we can help. We have a free policy template plus staff training slides that you can download and use for your organization.

Employee DCAA Timekeeping Training Structure

Let’s face it, most mandatory company training isn’t exactly thrilling, so you need to work to keep the attendees focused and engaged.

Using the slide deck we linked above will help, but you'll want to layer in a few more elements to reinforce understanding.

We recommend structuring the training in the following way, which is suitable for both an in-person and virtual audience:

1. Start with the slide deck to go over the most important points of the policy, timekeeping expectations, and compliance requirements.
2. At the end of the presentation, take questions from the audience so everyone has the chance to clear up anything they didn't fully understand
3. Next, move on to a demonstration on how to use your timekeeping system.
4. Let everyone have hands-on practice using the timekeeping system and creating DCAA-compliant time entries.
5. Move on to real-world scenarios (we’ve included some below) that reflect situations employees commonly face. Make sure everyone knows how to navigate them using the timekeeping system. For example:
   
   • Correcting a missed time entry
   • Identifying direct vs. indirect work
   • How to record time off 
6. Close the session by providing handouts of essential information:
   
   • A copy of the policy or a summary of the most important points
   • Your list of charge codes relevant to indirect and direct activities
   • A written guide on using the timekeeping system 
7. Don’t forget to document attendance and completion. You’ll need this in case of an audit or floor check.

Employee DCAA Timekeeping Onboarding Script

Stick to essential knowledge. The attendees can dig into policy specifics later on. 

With that in mind, training should focus on these objectives:

1. Timekeeping responsibilities
2. The difference between direct and indirect time
3. How to record time properly
4. How to make a time entry correction
5. The lines of contact and reporting

Below is a bullet-point script that you can adapt to your own voice and style.

Part 1: Responsibilities

Why timekeeping is important

• Labor is typically the highest cost on our government contracts
• The government relies on our time records to ensure the correct amount is paid
• Incorrect timesheets lead to audits, penalties, and the potential loss of business
• Accurate timesheets protect both you and the organization
• Each timesheet acts as a legal record, which is necessary for accurate contract billing and as evidence during audits

Employee responsibilities

• Every worker must track time daily and record all hours worked
• Each time entry must be assigned to the right project, task, and charge code
• All overtime hours and time off must be recorded in the timekeeping system
• Time entries must reflect actual work performed (not made up)
• Timesheets have to be submitted on time

The rules that must be followed

• Enter time daily, not after the fact (like at the end of the week)
• Do not prefill timesheets in advance (even if shift patterns are predictable)
• Assign the correct project and code to each time entry
• Do not adjust timesheets on behalf of someone else
• Do not charge time to a project that you didn't work on
• Do not delete time entries without first documenting and justifying them
• Follow the official process for any time entry adjustments
• Do not falsify time data under any circumstances

Part 2: The difference between direct and indirect time

• Direct time is work performed on a specific contract or project. The hours can be clearly tied to a single job.
• Indirect time is work that supports multiple contracts or the business as a whole. The hours cannot be reasonably tied to a single project.

Direct vs. indirect time examples

• Direct time examples include:
  
  • Writing code for a product related to contract A
  • Running a report required by project B
  • On-site prep work under a funded task order
  • Preparing support materials for Program D
  • Conducting site inspections funded under Task Order E
• Indirect time examples include:
  
  • A team meeting
  • Data security training
  • General admin work
  • HR support
  • Preparing payroll runs

Part 3: How to record time properly

Essential timesheet information

• All timesheets must include the date, name, and job role
• They must also include all hours worked for the period, broken down by project and task
• Each time entry requires the applicable charge codes plus a concise yet meaningful description of the work performed

Timesheet description examples

• Avoid generic, catch-all phrases like “project work,” “admin,” “miscellaneous,” and “meeting.” These don’t give enough context for what actually happened.
• Some good examples include:
  
  • Reviewed the engineering change request, confirmed the work matched the contract requirements, and documented notes in the project file.
  • Completed scheduled system maintenance and checked that everything was working correctly afterward.
  • Reviewed test data, summarized the results for the technical lead, and saved all supporting documents in the approved project folder.

What does “all hours worked” mean?

• Time must be entered daily as you work
• Time cannot be logged after the fact (like catching up at the end of the week)
• Time that hasn’t yet occurred cannot be logged, so no prefilling timesheets
• Every project/task worked on requires its own separate time entry; you can’t mix multiple activities into one time entry
• If zero hours were worked, an entry is still required to reflect the reason for the time off
• All overtime must be recorded, whether it was compensated or not
• Hours cannot be manipulated, reduced, or inflated

Using charge codes on time entries

• Each project has its own charge code
• Indirect work also has charge codes
• You must assign the right code when creating a time entry
• If you’re not sure which code to use, ask someone
• We will provide a list of current charge codes

Timesheet submission

• Make sure your timesheets are submitted by the deadline
• Team supervisors will review all your time data to ensure it’s complete, reasonable, and that the correct codes have been assigned
• If there is an error, your supervisor will request that you make the correction

Part 4: Correcting timesheet errors

• If you or your supervisor notices a timesheet error, it must be corrected as soon as possible
• Do not delete any time data without first documenting it
• ALL timesheet adjustments have to be documented and timestamped with a clear reason for the change
• Supervisors will approve any changes made

Part 5: Lines of contact and reporting

• Contact [staff member] for any questions and concerns around the timekeeping policy and timetracking system
• If you see or suspect any falsified data or policy violations, please contact [staff member]

Part 6: Questions 

Take questions from your audience and clarify anything they may have misunderstood.

Real World Examples (What to Do and Not to Do)

Example 1: Late timesheet submission

If a situation arises that prevents daily entry and timesheet submission, you must notify your supervisor, then record your time and submit the timesheet as soon as possible. Retroactive entries must be documented, and you need to include the reason why they are retroactive.

If, due to a prolonged absence, you cannot submit a timesheet before the deadline, a supervisor may complete, sign, and submit it on your behalf and document that they did so.

What not to do: Do not wait until the end of the week to reconstruct all your hours from memory. You also cannot pre-fill your timesheet or ask someone to complete it on your behalf unless it follows the documented supervisory process.

Example 2: Forgetting to log hours

If you forget to log your hours and the timesheet has already been submitted, then you must follow this process:

• Notify your supervisor
• Make the corrections and resubmit the timesheet
• Document the corrections, giving a reason for the change and when it was made

What not to do: Never make timesheet corrections without documenting them. DCAA compliance requires organizations to maintain an audit trail of all time data changes.

Example 3: Tracking time during leave periods

All types of leave (sick, vacation, etc.) must be tracked on the timesheet. Once you have your leave approved, you can add it to the timesheet right before you are due to take it.

All time entries for leave have to be labeled by type. So, if you take leave for vacation, this must be indicated on the time entry. You must also indicate if it’s paid or unpaid.

What not to do: While it’s okay to create retroactive time entries for leave periods, it’s not okay to leave them off the timesheet altogether. All working hours must be accounted for (whether you actually worked them or not). So, if your standard workweek is 40 hours, then 40 hours' worth of entries must go on the timesheet.

Example 4: Tracking uncompensated overtime

If you are on a fixed salary and, therefore, not entitled to receive compensation for any overtime hours you work, you must still document them.

Once you have tracked your standard daily working hours, label the additional time entries as uncompensated overtime, so there is a clear distinction between compensated and uncompensated work.

What not to do: Do not lump uncompensated time in with compensated time. If you reach your daily working hour limit, create the time entry and then start a new one for the uncompensated time, even if you continue working on the same task.

Example 5: Determining direct vs. indirect work

Getting the right charge code on a time entry is extremely important. 

If you are ever unsure whether the work you performed is considered direct or indirect, reach out to your supervisor and ask. If they are not available, contact HR or compliance. 

What not to do: Never guess a charge code, and never apply one that “looks right” but you’re not sure. Always ask to confirm a code is correct.

A Guide to Manager Timekeeping Enforcement

An often-overlooked aspect of training is not emphasizing the importance of the manager’s role.

Managers oversee compliance and ensure their team is producing timesheets in accordance with the policy. It should not be treated as an administrative click-through task.

All managers should be given time in their agenda to dedicate their attention to timesheet reviews.

Here’s a solid process you can implement.

Daily manager checks

Since time must be completed daily, it makes sense for managers to check with this frequency. If it’s left until the end of the week, the data piles up, and the review becomes far more difficult to do well.

Therefore, each day, managers should:

• Verify that their team has entered and submitted time for the prior workday by a set time (e.g., lunchtime)
• Perform a same-day follow-up on any missing time entries, anomalies, etc.
• Require that team members correct errors promptly and explain why the changes were made

Important: Make it very clear that managers are prohibited from prefilling time, estimating time entries, and directing team members to “just assign the time anywhere.”

Review and approve

At the end of each week, managers must ensure that all team members have completed and signed off on their timesheets. Next comes the official verification:

• Managers should review total hours, charge codes, overtime, and indirect vs direct mix against planned assignments before approving.
• Timesheets with unclear or missing descriptions or anomalies have to be rejected and sent back to the employee for correction (this should be minimal if daily checks are put in place).
• Once the manager has approved the timesheet, all data must be locked to prevent any further edits.

Monitoring and metrics

It’s good practice to track managerial timesheet KPIs because this will show if each supervisor is taking timekeeping seriously.

The KPIs don’t have to be complicated, for example:

• Percent of team members with same-day entry
• Percent of on-time approvals
• Number of corrections per review period

If there are any exception patterns, like chronically late timesheets or repeated edits, they can be reviewed and escalated as necessary. For instance, additional training or coaching on the importance of DCAA compliance may be provided, and even disciplinary action for repeated violations.

Final Thoughts

While it may seem like there’s a lot for employees to remember, the entire timekeeping process becomes much simpler when you use DCAA-compliant time tracking software.

These digital tools help enforce correct time entry information and enable real-time tracking, giving you accurate data every time you log in.

Although the DCAA doesn’t mandate digital software, it strongly recommends it as the preferred method. So, if you’re still relying on manual methods, it’s worth exploring the digital options available.

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