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Cost Accounting Standards (CAS) for Dummies

Updated: Feb 1


Many of the Government’s compliance rules and programs can be complex and hard to follow. In this document we will walk you through determining if your contract/subcontract is CAS covered, what type of coverage it is subject to, what standards you are required to follow, and if your CAS contract/subcontract requires a Disclosure Statement.


So, let’s start at the beginning…


Cost Accounting Standards (CAS) are a set of 19 standards and rules put in place by the United States Government for use determining costs on negotiation procurements. CAS dictates the way in which a contractor must manage their accounting system and practices to meet the standards required by the government.


After receiving a contract/subcontract the first thing to do is to determine what type of CAS coverage, if any, your contract/subcontract is subject to.

STEP 1: CAS Exemptions

Your company may be subject to Full CAS Coverage (Requires compliance with all 19 CAS standards), Modified CAS Coverage (Requires compliance with standards CAS 401, CAS 402, CAS 405, and CAS 406), or be Exempt From Coverage. To determine what kind of coverage your contract/subcontract is subject to, you must first see if it falls under any of the following exemptions:

CAS Exemptions List

CAS Exempt Box

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STEP 2: CAS Coverage

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If your contract/subcontract does not meet any of the exemptions, then you are subject to either “Full” or “Modified” CAS coverage. To determine which coverage you are subject to, you must see if the contract or contractor meets either of the following qualifications:

CAS Coverage Qualifications List

Full and Modified CAS Coverage Boxes

Step 3: Disclosure Statements


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Once you determine the CAS coverage you are subject to, the last step is to identify your disclosure requirements. Disclosure Statements serve to describe and document your accounting practices to provide consistency in reporting of costs and ensure you are properly and thoroughly following the CAS

standards. Contractors/Subcontractors that are subject to Full CAS Coverage are required to submit a Disclosure Statement, while contractors/subcontractors that are subject to Modified CAS Coverage are required to submit a Disclosure Statement only if the following qualification is met:

CAS Disclosure Statement Qualification List

Once your Disclosure Statement is submitted to your contracting officer, they will have auditors determine if your Disclosure Statement is up to date, accurate, and complete. The point of the statement and the thorough inspection is to determine if your organization has an adequate and compliant accounting system put in place to use and manage your awards efficiently, effectively, and accurately.


During the review you will be allowed to revise any parts of the Disclosure Statement that you feel are inadequate or do not fully represent the accounting standards you have in place. If everything looks good, the contracting officer will determine that the Disclosure Statement is compliant. If the contracting officer determines that the form is inadequate, you will be given 60 days to correct any deficiencies.

Cost Accounting Standards List

Cost Accounting Standards (CAS) List

Navigating Government Contract Accounting with CRI

This may all seem like a lot to take in, but it doesn’t have to be as complicated as it seems. Your goal is to win contracts that employ your strengths and add to your success. Our goal is to give you the support and runway you need to achieve that goal. Our outsourced accounting services are uniquely catered to government contract accounting, and can benefit government contractors in the following ways -


Increased Efficiency


By removing accounting demands from your plate, you allow your organization to focus on its sweet spot of expertise. Outsourced accounting frees up resources and allows you to allocate personnel, time, and capital more efficiently. This allows you to invest in the areas of your organization that are most profitable. On top of that, we provide streamlined accounting services, implementing market leading technologies (such as Deltek Accounting Software), keeping your books clean, transparent, and compliant.


Peace of Mind


Our experts have 30+ years of experience providing outsourced CAS accounting services to government contractors and have never failed an audit. We are specialized to meet the complex needs of government contract accounting and have the resources available to ensure compliance no matter the breadth or depth of your needs.


Lower Cost


Outsourcing is cheaper than hiring in house, plain and simple. Though it may not be for everyone, outsourcing back office services is a great way for growing organizations to optimize their effectiveness and support their needs without making big up-front purchases. Our customized offerings are designed to fill the gaps and round out your accounting needs in a way that fits into your processes and budget.


View our complete Managed Accounting Services to learn more or Contact Us for inquiries, pricing, and detailed information.

*Segment means one of two or more divisions, campus locations, or other subdivisions of an educational institution that operate as independent organizational entities under the auspices of the parent educational institution and report directly to an intermediary group office or the governing central system office of the parent educational institution. Two schools of instruction operating under one division, campus location or other subdivision would not be separate segments unless they follow different cost accounting practices, for example, the School of Engineering should not be treated as a separate segment from the School of Humanities if they both are part of the same division's cost accounting system and are subject to the same cost accounting practices. The term includes Government-owned contractor-operated (GOCO) facilities, Federally Funded Research and Developments Centers (FFRDCs), and joint ventures and subsidiaries (domestic and foreign) in which the institution has a majority ownership. The term also includes those joint ventures and subsidiaries (domestic and foreign) in which the institution has less than a majority of ownership, but over which it exercises control.


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