Audit 314934

Title: NOTE 2 - INDIRECT COSTS Accounting Policies: NOTE 1 - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards summarizes, at the agency or sub agency level, the expenditures of National Academy of Sciences (“NAS”) under programs of the federal government for the year ended December 31, 2023. The accompanying detailed schedule of expenditures of federal awards provides the same population of federal expenditures at the individual award level. For purposes of both accompanying schedules, federal awards include all grants, contracts, and similar agreements entered into directly between NAS and agencies of the federal government, and all sub awards to NAS by nonfederal organizations pursuant to federal grants, contracts, and similar agreements. All federal awards received by NAS are classified as one clustered major program, research and development awards, in accordance with the provisions of Office of Management and Budget (“OMB”) Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). In the accompanying schedules, NAS reports federal awards, within the research and development cluster, in the following categories: Advisory and Research - This category includes awards from executive and legislative agencies requesting that NAS either (1) form a committee of experts to research a scientific or technological issue (generally resulting in a report or a symposium) or (2) administer a federally sponsored research and development program. These awards are provided under cost type contracts and grants from various federal agencies. Fellowships and Other Support of Scholars - This category includes awards that support research and development fellow and scholar programs which NAS administers on behalf of the federal government. These awards are provided under cost type contracts and grants from various federal agencies. Pass-Through Funding - NAS is also the subrecipient of federal funds from nonfederal organizations. These funds are reported in the accompanying schedules as federal pass through funding received. NAS uses a modified-accrual basis accounting for reporting costs incurred on behalf of sponsors. All expenditures are recognized and recorded on a cash basis, except prepaid insurance, prepaid magazine subscriptions, prepaid postage, travel advances, and accrued annual leave, which are recognized on the accrual basis of accounting. Expenses that are recognized and recorded on other than a cash or accrual basis include the capitalization and subsequent depreciation/amortization of fixed assets and the related provisions of Cost Accounting Standard 414, Cost of Money. De Minimis Rate Used: N Rate Explanation: NAS has not elected to use the 10% de minimus cost rate allowed under the Uniform Guidance. Total expenditures as shown on the schedules include indirect costs recoverable from sponsors. Indirect costs for NAS consist of overhead and general and administrative expenses. The overhead rate is assessed against direct salaries, accrued leave, fringe benefits, and services provided by outside contractors on NAS property. The general and administrative rate is assessed against direct costs and overhead. NAS allocates indirect costs to government contracts and grants using fixed rates, with carryforward provisions, established by NAS’ cognizant agency. NAS has not elected to use the 10% de minimus cost rate allowed under the Uniform Guidance.

Title: NOTE 3 - ASSISTANCE LISTING NUMBERS Accounting Policies: NOTE 1 - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards summarizes, at the agency or sub agency level, the expenditures of National Academy of Sciences (“NAS”) under programs of the federal government for the year ended December 31, 2023. The accompanying detailed schedule of expenditures of federal awards provides the same population of federal expenditures at the individual award level. For purposes of both accompanying schedules, federal awards include all grants, contracts, and similar agreements entered into directly between NAS and agencies of the federal government, and all sub awards to NAS by nonfederal organizations pursuant to federal grants, contracts, and similar agreements. All federal awards received by NAS are classified as one clustered major program, research and development awards, in accordance with the provisions of Office of Management and Budget (“OMB”) Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). In the accompanying schedules, NAS reports federal awards, within the research and development cluster, in the following categories: Advisory and Research - This category includes awards from executive and legislative agencies requesting that NAS either (1) form a committee of experts to research a scientific or technological issue (generally resulting in a report or a symposium) or (2) administer a federally sponsored research and development program. These awards are provided under cost type contracts and grants from various federal agencies. Fellowships and Other Support of Scholars - This category includes awards that support research and development fellow and scholar programs which NAS administers on behalf of the federal government. These awards are provided under cost type contracts and grants from various federal agencies. Pass-Through Funding - NAS is also the subrecipient of federal funds from nonfederal organizations. These funds are reported in the accompanying schedules as federal pass through funding received. NAS uses a modified-accrual basis accounting for reporting costs incurred on behalf of sponsors. All expenditures are recognized and recorded on a cash basis, except prepaid insurance, prepaid magazine subscriptions, prepaid postage, travel advances, and accrued annual leave, which are recognized on the accrual basis of accounting. Expenses that are recognized and recorded on other than a cash or accrual basis include the capitalization and subsequent depreciation/amortization of fixed assets and the related provisions of Cost Accounting Standard 414, Cost of Money. De Minimis Rate Used: N Rate Explanation: NAS has not elected to use the 10% de minimus cost rate allowed under the Uniform Guidance. The accompanying detailed schedule of expenditures of federal awards provides specific identifying award information assigned by the respective federal sponsor in the absence of Assistance Listing numbers.