FAR Part 31 Cost Principles Training

This course covers FAR Part 31 Cost Principles, focusing on cost accounting and allowability in government contracts. Attendees will learn about compliant systems, key cost types, recent regulatory changes, and audit trends. The course also examines cost issues relevant to your organization, specifically for commercial entities under FAR 31.2.


Course Overview

This comprehensive seminar will provide attendees with an in-depth understanding of FAR Part 31 Cost Principles, essential for navigating the complexities of cost accounting and cost allowability in government contracting. Attendees will gain insights into establishing a compliant job cost accounting system, which includes segregation of costs by contract, direct cost charging, indirect cost groupings, proper allocation bases, and identifying unallowable costs. The course will also cover the proper documentation of expenses and the penalties associated with unallowable costs.

A detailed discussion on specific cost types identified in FAR 31.205—such as employee morale and welfare, legal, public relations, advertising, travel, and relocation—will be provided. Additionally, the seminar will address recent or proposed regulatory changes and evolving trends in government contract audit interpretations. Attendees will be invited to share and discuss cost allowability issues specific to their organizations. This seminar will exclusively cover selected costs applicable to commercial organizations under FAR 31.2, differentiating from contracts with educational institutions, non-profit organizations, and state, local, or Indian tribal governments.

Course Objectives

At the completion of this one-day comprehensive class participants will be able to:

  • Identify the types of contracts whose contract cost estimating, and cost accounting/reporting/billing are subject to FAR Part 31
  • Identify the FAR subparagraphs which define direct vs. indirect cost allocation concepts
  • List the three fundamental criteria for cost allowability on government contracts
  • Identify the high-risk cost categories and the applicable FAR Part 31 allowability criteria
  • Utilize DCAA’s website as a resource for identifying cost allowability regulations, interrelated regulations, and DCAA “interpretations” (which are not always consistent with the regulations)

Program Content

This course will cover the following topics:

  • FAR 31 applicability and exemptions
  • Distinctions and links between FAR and CAS
  • Accounting for unallowable costs
  • Direct costs distinguished from indirect costs and cost allocability concepts
  • Cost reasonableness principle & very recent developments
  • Cost documentation standards including records retention
  • Advance agreements
  • Certification of indirect costs and penalties provisions
  • DCAA “interpretations.” generally, but not always consistent with the underlying regulation(s)

The course will cover some of the most high-risk cost categories in FAR Part 31.205 with open discussion and panel input including:

  • Employee morale and welfare vs. entertainment
  • Advertising and public relations
  • Compensation (including a discussion of a number of ASBCA case)
  • Professional and consulting fees
  • Travel and business meetings
  • Legal costs
  • Selling and marketing
  • Reasonableness
  • Documentation

Course Run Time

  • 8 Hours

CPE Credit

  • CPE credit is available using the following training methods: Custom Training, In Person Training (Group), In Person Training (Individual), and Live Webinar Training.
National Registry of CPE Sponsors

Redstone Government Consulting, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Additional information


CPE Available

Training Methods Available

Custom Training Available, In Person Training (Group), In Person Training (Individual), Live Webinar Training, LMS Course Package