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DCAA compliance implies demonstrated adherence to regulations in proposals, operational systems, and other topics analyzed by auditors of the Defense Contract Audit Agency (DCAA). A prime contractor, subcontractor, or grantee (contractor) claiming federal funding, certifies the organization adheres to the terms and conditions of the award document. Those terms and conditions feature the Federal Acquisition Regulations (FAR) Parts 30 and 31. Part 30 describes requirements for contractors covered by the Cost Accounting Standards, Part 31 for the remainder. Of that remainder Subpart 31.1 describes applicability; some organizations comply with a circular from the Office of Management and Budget. DCAA compliance evaluates adherence with all of these.

Notice that the contractor certifies compliance with terms and conditions, especially the FAR. The burden of proof, therefore, rests with the contractor. DCAA compliance, determined from audit trails, includes adequate supporting documentation. For example, a credit card receipt attached to a Travel Reimbursement Request does not show an auditor that the total amount paid includes no alcohol or entertainment (specifically unallowable costs). Only the detailed receipt, showing purchases of specific meals and beverages, adequately supports costs (eventually) paid with government funds.

Implemented policies and procedures, designed to consistently produce adequate audit trails, can form compliant systems. Only costs that are allocable (to the contract, job, Line Item); reasonable (accurate, complete, and not obsolete); and allowable (as defined in FAR Part 31) may be proposed, recorded, and/or invoiced to the U.S. Government. When contractor records, actual practices, and management vigilance show such implementation, the contractor achieves DCAA compliance.