Finding Text
Finding 2025-007 – Allowable Costs/Cost Principles: Indirect Costs Charged in Excess of Approved Rate – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies –Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.414 requires recipients to apply indirect costs in accordance with the approved negotiated indirect cost rate agreement or the indirect cost rate specifically authorized by the terms and conditions of the federal award.; Condition – For two grants, APU applied an indirect cost rate that exceeded the rate authorized by the applicable grant agreement.; Cause – Management did not have sufficient review procedures to verify that the indirect cost rate applied to award expenditures agreed to the rate authorized by the applicable grant agreement before costs were charged.; Effect or Potential Effect – Without effective review of indirect cost rates before costs are charged to federal awards, indirect costs may be calculated using an incorrect rate, increasing the risk that amounts charged to the award exceed the rate authorized by the grant agreement.; Questioned Costs - None reported.; Context – Indirect costs were charged to 13 grants totaling $437,103 of indirect costs. We recalculated total indirect charged for the entire population and identified a total overcharge of $2,238. We selected six programs for control testing totaling $42,760 of indirect costs and identified exceptions in two programs where the indirect cost rate applied exceeded the rate approved in the applicable grant agreement.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should identify and correct indirect costs charged above the allowable rate and implement review procedures to ensure future charges comply with the grant agreement.; Views of Responsible Officials – Management concurs with the finding and has strengthened review procedures to ensure indirect costs are charged using the rates authorized by award.