According to the Defense Contract Audit Agency’s (DCAA) Audit Manual, “The manipulation of charges to a contract may be subject to criminal penalties under 18U.S.C. 1001, which reads as follows: “Whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States knowingly and willfully (1) falsifies, conceals or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry; shall be fined under this title or imprisoned not more than five years, or both.”
Now, what does that mean?
It means, you need to keep a timesheet – one that’s accurate or you could face stiff fines or even go to prison. In addition, companies may face Qui Tam lawsuits by employees (known as whistle blowers – who get a 15% – 30% monetary reward for turning you in for your fraudulent behavior), and you will be fined and be debarred from doing business with the Government for timesheet mischarging.
It may seem trite, but here are some real life examples of mischarging and consequences:
According to the allegations, which were recently disclosed by the Department of Justice, Boeing consistently overcharged the U.S. government for wages and labor pursuant to a contract it held for the repair and maintenance of the C-17 Globemaster aircraft.
Boeing is alleged to have billed the government for labor hours contemporaneously for more than one job. Boeing is also alleged to have charged the government for labor hours completed after a job had concluded, charged hours to the wrong job, and billed hours at a higher rate for maintenance work when, in reality, the time was being spent on non-chargeable work or work billed at a lower rate.
So, what goes on the timesheet and who needs to keep one? Everyone in the company who’s working directly or indirectly on a government funded project must keep a timesheet.
These timesheets should be prepared daily, and all time spent on direct jobs should be recorded as well as time spent on indirect activities, vacation, holidays, and sick leave. These timesheets are to be gathered at the end of a payroll period, approved by a supervisor and provided to accounting who will record the time and costs among the various general ledger accounts and projects. Timesheets must be prepared in ink on a daily basis, and be signed by the employee and the employee’s direct supervisor. Additionally, any changes need to be crossed out and initialed by the employee (and NOT erased).
From a cultural perspective, it’s important to instill the relevance of timesheets to your employees so they understand the need to complete them timely and accurately.
The procedures noted above are requirements to be compliant, however you can use electronic timesheets as long as they perform the same functions. Effectively, an electronic timesheet needs to create a forensic trail.
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