Finding Text
Condition: For the year ended December 31, 2024, the Academy’s allowable indirect costs were limited to $677,264 based on total modified direct costs. Based on results of procedures, $265,687 of indirect costs were charged to the grant during the year ended December 31, 2024. Criteria: The Academy correctly embedded a 10% allowable rate in its contract. However, as defined by 2 CFR Section 200, total modified direct costs equal total direct costs less all but $25,000 of subawards (regardless of the period of performance of the subaward). Cause: The Academy did not properly calculate allowable indirect costs under the grant award during the year ended December 31, 2024. Effect: Amounts charged to the contract exceed allowable costs by $197,961, prior to correction. Recommendation: Management should develop procedures to calculate allowable indirect costs under its awards.