Finding Text
2022-005 Indirect Cost Allocations - Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Program: Research and Development Cluster (ALN 47.041, Award Period 9/1/19 – 8/31/22)
Federal Agency: National Science Foundation
Criteria: Program costs for allocation of indirect costs were based on percentage of total costs at year end and not allocated based on specific allocations of costs incurred and approved in a timely manner as required by 2 CFR 200.414.
Condition: Our testing noted that program charges include journal entries allocate indirect costs without necessary review and approvals to ensure allowability of the costs to program activities.
Cause: The Organization lacks written policies, approval procedures and documentation to allocate indirect costs to the program.
Effect: The Organization is not compliant with 2 CFR 2 CFR 200.414 which requires accurate, and complete disclosure of financial results including the allocation of approved and identified actual indirect costs incurred to the program in accordance with 2 CFR 200.414.
Identification as a repeat finding, if applicable: The finding is a repeat of Finding 2021-006 in the prior year.
Recommendation: We recommend the Organization establish policy and procedures to identify and approve allowable indirect costs chargeable to the program on a monthly basis and report this allocation in the accounting ledger separately from the general expenses of the company.
Response: The Organization will allocate indirect costs to program costs based on incurred costs. Monthly allocations will be approved by the program administrator and separately reported in the general ledger.
Questioned Costs: $78,400 – This is the amount of indirect costs charged to the program.