Finding 22316 (2022-002)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-06-21
Audit: 23009
Organization: Denver Research Institute, Inc. (CO)

AI Summary

  • Core Issue: Incorrect indirect cost rates were applied to two federal awards, leading to billing discrepancies.
  • Impacted Requirements: Compliance with 2 CFR 200, which mandates consistent treatment of indirect costs across federal awards.
  • Recommended Follow-Up: Improve the year-end close process to ensure accurate calculation and application of indirect costs for all federal awards.

Finding Text

Finding 2022-002: U.S. Department of Health and Human Services - Regents of the University of California San Francisco - Allergy and Infectious Diseases Research - Assistance Listing No. 93.855.U.S. Department of Health and Human Services - Palo Alto Veterans Institute for Research - Family and Community Violence Prevention Program - Assistance Listing No. 93.910. Allowable Costs, Significant Deficiency Criteria: 2 CFR 200 requires indirect costs to be accorded consistent treatment to all federal awards. Condition: The indirect cost rate was not correctly charged to two federal awards during the year. Effect: One federal awards was under billed and one was over billed for indirects which resulted in an audit adjustment. Questioned Costs: None. Context: During our testing of indirects, we noted two out of the seven federal awards tested were not charged the correct indirect cost rate for the year. Cause: The Organization did not include an indirect charge on each invoice for one federal award and charged the incorrect rate on another federal award. Recommendation: We recommend the Organization enhance its year-end close process to include calculating the indirects charged to all federal awards for the entire year to ensure the indirects have been properly charged to the grant and with the correct rate.

Corrective Action Plan

Finding 2022-002: U.S. Department of Health and Human Services - Regents of the University of California San Francisco - Allergy and Infectious Diseases Research - Assistance Listing No. 93.855.U.S. Department of Health and Human Services - Palo Alto Veterans Institute for Research - Family and Community Violence Prevention Program - Assistance Listing No. 93.910. Allowable Costs, Significant Deficiency Auditor Recommendation: We recommend the Organization enhance its year-end close process to include calculating the indirects charged to all federal awards for the entire year to ensure the indirects have been properly charged to the grant and with the correct rate. Corrective Action: The Standard Operating Procedures (SOPs) for the Grants & Contracts department have been enhanced to include the current indirect rates through the monitoring process of the Grants Milestone Calendar. As previously noted, this cornerstone process reminds the grants department of a monthly review for all areas of each grant. This provides insight of the progression of the grant, meeting or exceeding thresholds and milestones, the project timeline of the grant, accuracy for invoicing, correct indirect rates, and so on. This is monitored on a monthly basis through the Operations Timeline Schedule, moving through the monthly system and is reviewed, and approved by the Grants Director, then the Executive Director. This is an actionable item in the system. Responsible Party: Grants Department, and Executive Director Anticipated Completion Date: This corrective action is currently in effect as of April 30, 2023

Categories

Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 22317 2022-002
    Significant Deficiency
  • 598758 2022-002
    Significant Deficiency
  • 598759 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.855 Allergy, Immunology and Transplantation Research $578,856
93.910 Family and Community Violence Prevention Program $175,902
93.866 Aging Research $51,126
12.420 Military Medical Research and Development $43,396
93.395 Cancer Treatment Research $15,413
93.837 Cardiovascular Diseases Research $12,080
93.840 Translation and Implementation Science Research for Heart, Lung, Blood Diseases, and Sleep Disorders $4,490
93.399 Cancer Control $844