Finding Text
Criteria: Per Uniform Guidance 2 CFR 200.414, governmental entities must submit an annual indirect cost proposal or cost allocation plan to their cognizant agency for review and approval to recover indirect costs. Condition: The Office on Aging did not update or submit its indirect cost allocation plan for the fiscal year ended June 30, 2025. Consequently, indirect costs were charged to federal awards based on an expired rate or plan. Cause: The Office on Aging lacked a formal process or assigned personnel responsible for ensuring the annual renewal of the indirect cost plan. Effect: Indirect costs charged to federal programs during the year may be unallowable or inaccurate, leading to potential over-recovery or under-recovery of federal funds. Questioned Costs: Undetermined amount representing the total indirect costs charged using the unapproved plan. Auditor’s Recommendation: The Office on Aging’s management should implement a policy to ensure the indirect cost plan is updated and submitted annually to the cognizant agency. All future charges should be based on an approved, current Negotiated Indirect Cost Rate Agreement (NICRA).