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Fundamentals: Exploring Unallowable Costs

June 28, 2022
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Unallowable costs have long been a prime target for the Defense Contract Audit Agency (DCAA) Auditors. Proper identification and segregation of unallowable costs is a key criteria of an adequate accounting system and failure to properly segregate such costs may result in penalties. Contractors need to segregate both expressly and directly associated unallowable costs as well as maintain proper documentation in order to withstand audit scrutiny. 

Please join Mike Mardesich and Brad Tress of FORVIS' Government Contracting Advisory Team as they discuss the following:

  • FAR Cost Principles and Unallowable Costs
  • Directly Associated Unallowable Costs
  • Best Practices to Identify and Segregate Unallowable Costs
  • Penalties for Unallowable Costs
  • DCAA’s recent internal guidance indicating their interpretation of FAR Part 31 expressly Unallowable Costs
  • Grey areas of Unallowable Costs

Learning Objectives

Participants will gain a basic understanding of unallowable costs with a focus on the cost elements most frequently questioned by government auditors.



Mike Mardesich, Brad Tress

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