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Dassian

Material Management and Accounting System

 

The Code of Federal Regulations (CFR) Title 48 Chapter 2 Subchapter G Part 242 Subpart 242.70 – Contractor Business Systems states that acceptable contractor business systems are defined in the clause at Defense Federal Acquisition Regulation Supplement (DFARS) Part 252 Subpart 252.2 Section 252.242 Subsection 252.242-7005 – Contractor Business Systems.

DFARS Subsection 252.242-7004 requires an acceptable Material Management and Accounting System (MMAS) to accomplish the following:

  1. Maintain adequate internal controls to ensure system and data integrity
  2. Establish an adequate system description including policies, procedures, and operating instructions that comply with the FAR and DFARS
  3. Ensure that costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements as impacted by minimum/economic order quantity restrictions
  4. Provide a mechanism to identify, report, and resolve system control weaknesses and manual override
  5. Provide audit trails and maintain records necessary to evaluate system logic and to verify through transaction testing that the system is operating as desired
  6. Establish and maintain adequate levels of record accuracy including reconciliation of recorded inventory quantities to physical inventory by part number on a periodic basis
  7. Provide detailed descriptions of circumstances that will result in manual or system generated transfers of parts
  8. Maintain a consistent, equitable, and unbiased logic for costing of material transactions as follows:
  9. Where allocations from common inventory accounts are used, have controls to ensure that reallocations and any credit due are processed no less frequently than the routine billing cycle, that inventories retained for requirements not under contract are not allocated to contracts, and that algorithms are maintained based on valid and current data
  10. Have adequate controls to ensure that physically commingled inventories that may include material for which costs are charged or allocated to fixed-price, cost-reimbursement, and commercial contracts do not compromise requirements of any of the standards above and that Government-furnished material shall not be physically commingled with other material or used on commercial work
  11. Be subjected to periodic internal reviews to ensure compliance with established policies and procedures

 

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