What a floor check actually is

A floor check — DCAA calls it an "employee interview" or "labor floor check" — is the most physical, least abstract audit a government contractor will ever face. An auditor shows up, usually unannounced, picks employees at random, and asks each one a short list of questions: What are you working on right now? What charge number are you billing to today? Who is your supervisor? Where is your timesheet? Then they compare the answers to what your timekeeping system actually says.

That is the whole test. Everything else about labor accounting is documents and rates and policies an auditor reads at a desk. The floor check is the one procedure where DCAA gets out of the conference room and checks whether the system you described is the system your people actually use. It is designed to catch the gap between a beautiful written timekeeping policy and a workforce that batch-enters hours from memory at month-end. That gap is exactly what DCAA-compliant timekeeping exists to close, and the floor check is where it gets verified in real time.

Why DCAA does it this way

Labor is the largest cost element on most cost-reimbursable contracts, and unlike materials it leaves no receipt. There is no invoice that proves an engineer spent Tuesday on Contract A instead of Contract B — there is only the employee's own contemporaneous record. So the entire control rests on one thing: employees honestly recording their own time, daily, as it happens.

The floor check tests that control the only way it can be tested — by comparing a live answer against the record before anyone has a chance to reconcile the two. If the employee says "I'm on the Navy task order this week" and their timesheet shows the same charge code, the control is working. If the employee shrugs, or names a contract that doesn't match, or admits they'll "fill it in Friday," the auditor has found evidence that the labor data is reconstructed rather than real. That is a finding, and findings on labor accounting are among the fastest ways a small contractor loses the right to bill cost-type work.

The questions auditors actually ask

Floor-check questions are simple by design. An employee who does honest daily timekeeping can answer all of them without preparation:

  • What are you working on right now, and what project or contract is it for?
  • What charge number or charge code are you recording that work against today?
  • Have you recorded your time so far today, or when do you record it?
  • Who is your supervisor, and who approves your timesheet?
  • Do you know where the company's timekeeping policy is and what it requires?
  • Have you ever been asked to charge time to a contract you weren't actually working on? (This last one is the red-flag question — a "yes" is a serious problem.)

Notice what these questions are really probing: not whether the employee is smart, but whether the system produces truthful, current data as a byproduct of normal work. The correct answers are boring. Boring is the goal.

How a floor check goes wrong

The failures are predictable, and almost none of them are about dishonesty — they're about habits:

  • Batch entry. The employee hasn't recorded today's time yet and won't until the timesheet is "due." Now the auditor knows the record is reconstructed, not contemporaneous.
  • Charge-code confusion. The employee is genuinely working on the right thing but can't name the charge code, or names last month's code, because codes were assigned casually and never explained.
  • Someone else's timesheet. The employee says their admin or manager enters their hours for them. A person other than the worker recording labor is a classic red flag — the worker is the only one who can attest to what they did.
  • Bench ambiguity. A benched employee doesn't know what to charge and guesses a contract they're not actually on, instead of the correct overhead or B&P pool. Uncharged or miss-charged bench time is its own compliance exposure.
  • Leadership exemption theater. Senior staff who treat timekeeping as beneath them and can't answer the questions. Auditors specifically look up the chain, because leadership sloppiness signals a weak control environment top to bottom.

Every one of these is a habit problem, not a software problem. Which is why preparation is mostly about behavior.

How to make it a non-event

You cannot cram for a floor check — that's the point of it being unannounced. What you can do is build the conditions where a random employee, on a random day, answers correctly without thinking:

  • Enforce genuine daily entry. If everyone records time as they work, "have you recorded today's time?" is always yes. This single habit prevents the most common failure. Gentle automation — a reminder for missing days — beats a month-end scramble every time.
  • Make charge codes legible. Employees should see only the codes they're authorized to charge, with plain-language names, so "what charge number are you on?" has an obvious answer and nobody can accidentally bill a contract they're not staffed on.
  • Train everyone, including senior staff. A short, universal briefing on the floor-check questions and honest answers. Fold it into onboarding the same way you handle new-hire paperwork so every hire starts with the right reflexes, and repeat it for leadership specifically.
  • Give people permission to say "I don't know — let me check." An honest "I record my time every afternoon, let me pull it up" is a passing answer. Coach employees that the wrong move is guessing to look competent; the right move is showing the real record.
  • Keep the timekeeping policy findable and acknowledged. Every employee should know it exists and roughly what it requires. The auditor will ask.
  • Run your own internal floor checks. Have a manager or your facility security officer periodically ask a few people the real questions. You'll find your weak spots before DCAA does, and the practice normalizes the interaction so it isn't alarming when it's real.

Where the system carries the weight

A floor check is easy to pass when the underlying record is trustworthy by construction. In Hosting HR, timesheets capture daily entries against authorized charge codes with an immutable edit history and two-step employee/supervisor approval, so the honest, current record the auditor is checking for is simply the record your people already keep. When time is entered daily against codes employees actually recognize, the floor-check answer and the system agree because they were never allowed to drift apart.

The bottom line

A floor check feels intimidating because it's a surprise and it's in person, but it is genuinely the simplest audit there is: honest people who record real time daily pass it without preparation. The contractors who fail aren't unlucky — they're the ones who let timekeeping become a month-end formality, and the auditor caught the formality in the act. Build daily entry, legible charge codes, and universal training into how you operate — including into how you staff and onboard for every contract — and the floor check stops being a threat and becomes what it should be: a quick confirmation that your people are exactly where their timesheets say they are.

This is general guidance on DCAA floor checks for small contractors, not legal or accounting advice. Your DCAA-experienced accountant or consultant is the right partner for your formal timekeeping system description and audit preparation.